Salesforce’s energy efforts come with emissions baggage

In the landscape of Bay Area tech companies, Salesforce’s profile is arguably on par with the likes of Google, or else of Microsoft and Amazon up in Seattle. Unlike the hyperscalers, though, Salesforce doesn’t own or operate its own data centers, a fact that means it has a much different relationship to energy.

It uses a mix of colocated data centers and, increasingly, the public cloud, procuring compute rather than a specific spot in a specific data center. However, data center space is still the largest contributor to the company’s overall emissions; according to its latest report, Salesforce has seen a steady rise in location-based absolute emissions since 2021, in light of the artificial intelligence boom. The company’s location-based scope 3 emissions in particular rose by nearly 27% between 2019 and 2023, mirroring similar jumps from both Microsoft and Google.

Of course, Salesforce’s overall emissions are significantly lower than the hyperscalers that seem to release a new energy initiative weekly: roughly 1.6 million metric tons of carbon dioxide equivalent to Google’s 14.3 million in 2023. Nonetheless, the framing of the company's flagship Dreamforce conference earlier this month made it clear that Salesforce is positioning itself as an AI-energy leader. Salesforce took over several square blocks of San Francisco with panels focused on AI, energy, and their intersection — and a faux national park complete with boulders, waterfalls, and at least one live pony.

The tech world doesn’t yet have a consistent metric for measuring the energy intensity of AI, which is one area where Salesforce has been particularly active. The company has been steadily integrating AI into its enterprise offerings — including for utilities — and has been open about its own efforts to optimize models for energy efficiency. Earlier this year, Salesforce released a list of proposals “aimed at guiding AI regulation to minimize environmental impact and spur climate innovation,” that includes using “right-sized” models and requiring public disclosure of model energy efficiency and carbon footprint. 

At the same time, however, Salesforce has struggled with how to present its own progress toward decarbonization goals, and even in the face of criticism has been reluctant to change emissions reporting standards that some have called misleading — a fact that complicates the company’s bid to lead its customers to reduce emissions.

Efficiency for energy customers

At Dreamforce, alongside performances from Pink and Imagine Dragons, was a lineup of climate and energy-focused panels and events focusing on sustainable AI and the energy transition. The company especially touted its recently launched clean energy program for utilities to manage distributed energy resources.

It’s a process that will require phasing in AI tools in the energy sector, said Kelly James, who leads the company’s energy and utilities segment.

At the most basic level, utilities are using Salesforce’s platform for things like shaving a certain number of seconds off of each call in a call center, automating sales, or helping field workers generate pre and post job reports, James said. In the case of slightly more advanced utilities, Salesforce’s tools operate as a go-between to consumers with energy assets at home.

The landscape has shifted to a point at which utilities have to engage more with customers, and that’s where AI is already playing a role, she added.

In the case of a large utility like PG&E, for example, Salesforce would be the “primary application in their contact center, and a key part in their digital self-service portal,” she explained. Salesforce would also be integrated through to the systems that control assets like thermostats or chargers.

Sunrun, for example, is one of Salesforce’s major customers, as is EV charging management company Leaf. In an EV charging or battery discharge scenario, Salesforce’s platform would control communications back to the customer, managing overall programs and enrollments.

In the future, James said, Salesforce anticipates utilities will deploy its AI agents in the field, to help streamline maintenance and increase safety for crews. And programs will also run offline, with models being stored on individual devices.

Realizing that future, she added, requires smaller, purpose-built models, something Salesforce has already been developing. Those “right-size models” are not only small enough to be contained on a single device without an internet connection, such as for field work, but also use significantly less energy for training and deployment.

“All of that comes together for accelerating the tremendous efficiency that we need in order to get more physical work done in the field, and to connect stakeholders to really get work moving so that we can accelerate the energy transition,” James said. “I see it all as a part of a whole, to overall accelerate the energy transition.”

Mixed messages

Also on offer at Dreamforce: the company’s “Net Zero Cloud” product, designed to help companies track emissions targets. That effort pairs nicely with the company’s bread-and-butter customer management software — but is undermined somewhat by lingering controversy about how it reports emissions overall.

Like both Microsoft and Google, Salesforce has a goal to reduce 50% of absolute emissions by 2030, and to reach the Paris Agreement’s definition of “net zero” — reducing absolute emissions by 90% and offsetting the remainder using carbon removal— by 2040. 

In 2021, the company announced that it had achieved “net zero across its supply chain and 100% renewable energy.” They had not, of course, met the Paris definition of net zero. Instead, Salesforce wrote, the company had purchased enough carbon credits to match its Scope 1, 2, and 3 emissions.

Rich Kenny, managing director at hardware-focused environmental consulting firm Interact, said that the attempts of some tech companies to position themselves as “pioneering leaders in sustainable cloud” without playing by agreed-upon reporting rules is a broader trend in the industry (though those rules aren’t without problems of their own).

“Salesforce initially declared they were net zero, and they had changed what their version of net zero was,” Kenny said. Based on that definition, the company is “constantly hitting net zero because they offset the rest,” he added. This is similar to what Kenny said he’s seen from Amazon, which recently had its SBTI rating taken away for failing to align methodologies, he added.

Salesforce has since updated its announcement and climate materials to reflect this framing, which it now refers to as “net residual emissions.” This approach was met with skepticism and, from some, the perception that the company created its own, easier-to-accomplish definition of net zero. 

That FAQ has since been updated, and now reads: “While the guidance [from the Science-Based Targets Initiative] is valuable, there’s a gap in defining what claims companies can make in the near term regarding actions like procuring renewable energy, prioritizing emissions reduction, policy advocacy, philanthropy, sector-wide initiatives, and carbon credit usage.”

So, why report “net zero residual emissions” today, rather than only the decades-off Paris Agreement requirements?

For one thing, said Sunya Norman, Salesforce’s senior vice president of ESG strategy and engagement, there isn’t really consistency in how companies are reporting emissions at present. Given that Salesforce has been reporting net zero residual emissions since before the SBTI, she said, “it would be a departure for us to shift gears.”

“To be totally honest, our stakeholders are used to us telling this story in terms of net zero residual emissions,” she added. “That’s how our third party auditor has reviewed our claims and our stakeholder impact…so for now we’ve stayed consistent with that because we feel like it’s still an important story to tell.”

Long-term, Norman said Salesforce is looking ahead to the shift from voluntary corporate action and disclosures to a mandated landscape, like the EU’s corporate sustainability reporting directive.

“We’re aligning to SBTI, we report to Carbon Disclosure Project, we will report to [Corporate Sustainability Reporting Directive],” Norman said. “But I think that anyone who tells you they know exactly how they will report in two, or five years time, frankly, is lying to you, because things are moving so quickly, and guidance and implementation and best practices are not yet clear.”