From iPhone Chargers to Carbon Footprints: Apple's ESG Messaging Unpacked

Apple & ESG: Dreams versus Reality

Yesterday, Apple had its annual iPhone launch event, announcing its latest gadgets for sale. The company unveiled four new iPhone models: iPhone 15, iPhone 15 Plus, iPhone 15 Pro, and iPhone 15 Pro Max. These models feature Super Retina XDR displays and are powered by the A16 Bionic chip. Consumers can also buy these items in 5 different colours. The camera system in these phones has received updates, now including 48-megapixel resolution, an auto portrait mode, and 4K recording capabilities. Additional features like voice isolation, roadside assistance, and an emergency SOS were also introduced.

In the wearables category, Apple launched two new Apple Watches: the Series 9 and the Ultra 2. The Series 9 features a new S9 chip, claimed to be 60% faster than its predecessor. This watch introduces a double-tap control feature and has the ability to locate your iPhone. The Ultra 2 model offers a modular, ultra-customizable watch face and specialized power zones for exercise data collection. It also boasts the capability to log water dives. For more, see here, here, here, and here.

Apple's ESG Messaging Unpacked: Have We Been Here Before?

In addition to product announcements, Apple provided updates on its environmental initiatives.

Material Sourcing: Apple reported its plans to eliminate all plastic from its packaging by the end of the next fiscal year. It also claims to use 100% recycled aluminum in its MacBooks, Apple TVs, and Apple Watches. Leather is being phased out in iPhone cases.

Energy Usage: The company asserts that all Apple operational facilities, including offices, retail stores, and data centers, run on 100% clean electricity. They also claimed that over 300 suppliers have committed to using renewable energy.

Transportation: Apple disclosed a shift in its logistics strategy, prioritizing ocean shipping over air transport, allegedly resulting in a 95% reduction in transportation emissions.

Global Environmental Projects: Apple has invested in environmental initiatives such as forestation in Paraguay and Brazil, mangrove restoration in Colombia, and grassland conservation in Kenya.

Water Usage: A reduction of 63 billion gallons in water consumption was reported.

Long-Term Objectives: Apple aims for net-zero climate impact by 2030. They claimed that the Series 9 Apple Watch was carbon-neutral product.

Apple: Are They Really Green This Time?

Looking at these claims, it's important to consider Apple’s past track record when it comes to raising the green flag.  In 2020, Apple released the iPhone 12. However, they no longer included a charger, justifying this as an eco-friendly decision:

 “Apple is also removing the power adapter and EarPods from iPhone packaging, further reducing carbon emissions and avoiding the mining and use of precious materials, which enables smaller and lighter packaging, and allows for 70 percent more boxes to be shipped on a pallet. Taken altogether, these changes will cut over 2 million metric tons of carbon emissions annually, equivalent to removing nearly 450,000 cars from the road per year.”

One of the features of the iPhone 12 was fast charging. However, this capability would not work on old iPhone chargers. Instead, consumers needed to buy the new 20W charger – sold separately. Enticing people to buy an extra charger, predictably, would be a net boom for investors. Analysts from Deutsche Bank, cited by CNBC, observed that while "Apple claims that they are not shipping earphones and a charging cube with the iPhone to save the environment (they are including a charging cord), the reality is that such a decision could drive a financial benefit for the company as well."

 The same article was a bit skeptical of how truly environmental this initiative really was. They also saw dollar signs with the move, stating, “Despite Apple’s claim that the absence of the plug was a pro-environment move, it’s on track to see an uptick in its hardware accessories and wearables category thanks to the sale of the plugs and the new ecosystem it’s building around the iPhone 12′s MagSafe charging system. That category, which includes products such as the Apple Watch, AirPods, chargers and other accessories, has already shown promising growth. Sales jumped nearly 17% to $6.45 billion in Apple’s fiscal third quarter.”

For sales to jump in this category by the billions means more of the earth will need to be mined and fashioned into Apple products. That means Apple’s environmental footprint will increase, not decrease.

The bigger question, however, is why do we need these new iPhones in the first place? 

We’ll explore this question in future posts, exploring the right-to-repair, planned obsolescence, and modular phones.

Author: Malik Datardina, CPA, CA, CISA. Malik works at Auvenir as a GRC Strategist who is working to transform the engagement experience for accounting firms and their clients. The opinions expressed here do not necessarily represent UWCISA, UW, Auvenir (or its affiliates), CPA Canada or anyone else. This post was written with the assistance of an AI language model. The model provided suggestions and completions to help me write, but the final content and opinions are my own