Companies invest in climate technology to reduce emissions

1. Renewable energy sources

The main investment area for carbon reduction is renewable energy sources such as wind and solar, Papadopoullos said. Due to its cheaper cost, companies primarily invest in solar, he added.

Public cloud companies like Microsoft and Google are heavily investing in renewable energy, he said. This year, Microsoft signed a deal with Qcells, a solar technology company based in Seoul, South Korea, to supply 12 gigawatts of U.S.-produced solar panels through 2032. Meanwhile, Google helped finance a deal for increasing capacity at a geothermal power plant in Nevada.

"Microsoft and Google need lots of renewable energy for their data centers to power their cloud and AI," Papadopoullos said.

He added that it's not just tech companies investing in renewable energy. Beverage manufacturer PepsiCo and pharmaceutical company Eli Lilly that are investing in on-site solar panels.

2. Electric vehicles and alternative fuels

Companies are boosting investments in electric vehicles and alternative fuels to reduce carbon emissions, Papadopoullos said. Not only are automotive companies producing more electric vehicles, but companies are also assessing how to electrify fleets within their supply chains, he said.

Pointing to Walmart, Papadopoullos said the company added a hydrogen fuel-cell powered electric semi-truck to its fleet in Canada. Amazon also uses electric vehicles for delivery and is piloting alternative fuel projects, he said.

"You'll see a lot of companies trying to convert [gas] vehicle fleets to electric fleets," Papadopoullos said.

3. Batteries and energy storage

Electric vehicles and renewable energy sources rely on batteries to store and deploy energy, which Papadopoullos said will spur investment in those areas.

Microsoft and Google need lots of renewable energy for their data centers to power their cloud and AI.

He said innovation in batteries is helping the industry move away from traditional materials such as cobalt and nickel. Cobalt is mostly mined from the Democratic Republic of Congo, raising environmental and social concerns. Nickel is processed in countries such as Russia and China, which raises geopolitical concerns.

Companies experimenting with battery advances are focusing on sodium ion and other alternatives that don't use nickel or cobalt, Papadopoullos said.

"As companies install more on-site renewables, they're going to want more battery storage themselves in order to store some of that power, potentially sell excess power back to the grid and have that revenue stream," he said.

4. Monitoring tools

Companies are investing in and relying on monitoring tools such as artificial intelligence, satellites, internet of things devices, robotics, drones and digital twin technology to track their carbon emissions, energy use and environmental impact, Papadopoullos said.

Using such monitoring technologies provide data that can help companies operate more efficiently, he said.

"AI is a popular one," he said. "People use that if they've got lots of data around energy use and they want to optimize a complex system."

Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.