Siti Muinah
NVIDIA has released its Fiscal Year 2026 Sustainability Report, revealing a significant surge in its Scope 3 greenhouse gas emissions, which have nearly tripled from 3,638,432 metric tons of carbon dioxide equivalent (MT CO2e) in FY2024 to 10,700,940 MT CO2e in FY2026. This substantial increase is nearly equivalent to the annual emissions of a medium-sized country like Lebanon, highlighting a growing environmental footprint for the leading artificial intelligence (AI) chip manufacturer.
The report indicates that this dramatic escalation in emissions is predominantly driven by upstream activities, specifically the production of components, materials, and manufacturing services essential for NVIDIA’s high-performance GPUs and AI systems. As a fabless semiconductor company, NVIDIA relies heavily on its extensive network of manufacturing partners, primarily located in Taiwan and South Korea. This means that the environmental burden is increasingly being shifted to these manufacturing hubs, where hundreds of NVIDIA’s ecosystem partners operate. Critically, the sustainability report underscores that Scope 3 emissions now constitute over 99% of NVIDIA’s total carbon emissions, underscoring the critical importance of addressing its extended value chain.
The Growing Challenge of Upstream Emissions
NVIDIA’s business model, characterized by its reliance on outsourced manufacturing, places a significant emphasis on the environmental practices of its supply chain. The reported tripling of Scope 3 emissions signifies that the environmental impact of producing the foundational elements of its cutting-edge technology is escalating at an alarming rate. These upstream emissions encompass a broad spectrum of activities, from the extraction of raw materials and the manufacturing of semiconductors to the assembly of final products.
The concentration of NVIDIA’s manufacturing ecosystem in East Asia, particularly Taiwan and South Korea, means that the energy sources powering these crucial operations directly influence the company’s overall carbon footprint. These regions, while technological powerhouses, have historically relied on a significant proportion of fossil fuels for their energy generation. The report’s findings suggest that despite NVIDIA’s recognition of the energy challenges inherent in AI, concrete actions to ensure its suppliers are transitioning to cleaner energy sources remain insufficient.
Greenpeace East Asia’s Scrutiny and Call for Action
Greenpeace East Asia, a prominent environmental advocacy group, has closely examined NVIDIA’s sustainability reporting and has voiced significant concerns regarding the company’s progress in decarbonizing its supply chain. Rachel Yu, Climate and Energy Campaigner at Greenpeace East Asia, commented on the report’s findings, stating, "Jensen Huang reiterated in the sustainability report that AI is a ‘five-layer cake’ with energy being the foundation. He admitted that ‘the energy challenge is real. It’s solvable,’ and pointed to renewable energy as a key part of the solution. However, NVIDIA’s foundry suppliers in East Asia are heavily relying on fossil fuels. From what the company has reported to date, we have yet to find any evidence of NVIDIA making renewable energy investments in its supply chain."
This statement highlights a critical disconnect between NVIDIA’s acknowledgment of the energy challenge and the tangible steps being taken to address it within its most impactful emission sources. Greenpeace’s analysis points to a lack of disclosure regarding specific initiatives, such as power purchase agreements (PPAs) or direct investments in renewable electricity infrastructure, that would demonstrably support its suppliers’ transition to cleaner energy.
A Lagging Performance Compared to Industry Peers
The sustainability report also implicitly positions NVIDIA behind some of its major technology counterparts in terms of supply chain decarbonization efforts. Previous research conducted by Greenpeace has indicated that NVIDIA has been lagging behind its industrial peers in cleaning up its supply chain. In contrast, other tech giants like Google have been actively engaged in supporting their East Asian suppliers’ renewable energy transitions. This suggests that while the demand for AI infrastructure continues to surge, NVIDIA’s approach to managing the associated environmental impact may not be as proactive as some of its competitors.
A recent study by Greenpeace East Asia on NVIDIA’s supply chain decarbonization progress revealed that only approximately a quarter of the electricity consumed by the company’s top suppliers in East Asia was sourced from renewable energy. This low ratio, as of March 2026, underscores the significant reliance on fossil fuel-based electricity within the manufacturing processes that produce NVIDIA’s critical components.
Acknowledging the Challenge, Demanding Concrete Solutions
The environmental implications of the rapid growth in AI are multifaceted, extending far beyond the direct energy consumption of data centers. The manufacturing of the advanced semiconductors and related hardware required to power AI development and deployment represents a substantial, and increasingly dominant, portion of the industry’s carbon footprint. As NVIDIA continues to lead the market in AI hardware, its responsibility to mitigate the environmental impact of its entire value chain becomes paramount.
The urgency of this situation was further emphasized by a recent encounter between Greenpeace East Asia activists and NVIDIA CEO Jensen Huang in Taipei. During this interaction, Huang reportedly acknowledged the importance of investing in renewable energy with his suppliers. Yu from Greenpeace stated, "When confronted by Greenpeace East Asia activists in Taipei last month, Jensen Huang acknowledged the importance of investing in renewable energy with its suppliers. With NVIDIA’s supply chain emissions almost tripling, the case for immediate, concrete action to decarbonize its manufacturing supply chain is urgent. It needs to start with setting clear, time-bound renewable energy targets for its supply chain in East Asia."
Greenpeace East Asia’s Demands
In light of the escalating emissions and the perceived lack of concrete action, Greenpeace East Asia has put forth specific demands for NVIDIA to address its supply chain’s environmental impact:
- Implement a clear and time-bound renewable energy roadmap for its entire supply chain. This roadmap should include ambitious targets for the percentage of renewable energy to be utilized by its key manufacturing partners.
- Actively support its suppliers in their transition to renewable energy. This support could manifest through financial investments, technical assistance, or the negotiation of long-term power purchase agreements for renewable electricity.
- Increase transparency regarding its supply chain’s environmental performance. This includes disclosing detailed data on energy consumption, greenhouse gas emissions, and the proportion of renewable energy used by its suppliers.
- Set science-based targets for Scope 3 emissions reduction, aligned with the goals of the Paris Agreement.
Broader Implications for the Tech Industry and Climate Action
The findings of NVIDIA’s Sustainability Report and the subsequent commentary from Greenpeace East Asia have far-reaching implications. Firstly, they underscore the critical need for greater transparency and accountability from all major technology companies regarding their Scope 3 emissions. As the demand for AI-powered technologies continues its exponential rise, the environmental cost of producing the necessary hardware cannot be ignored.
Secondly, the report highlights the complex challenges of decarbonizing global supply chains, particularly those concentrated in regions with a significant reliance on fossil fuels. It emphasizes that technological innovation alone is not sufficient; a concerted effort is required from both the demand side (companies like NVIDIA) and the supply side (manufacturers and energy providers) to drive the transition to a low-carbon economy.
The situation also raises questions about the effectiveness of current corporate sustainability reporting mechanisms. While reports provide valuable data, they must be accompanied by demonstrable action and a commitment to measurable progress. The call for concrete investments and time-bound targets suggests that voluntary commitments may not be enough to drive the necessary transformation.
Finally, the increasing emissions from the tech sector, particularly driven by AI, could pose a significant challenge to global climate goals if not addressed proactively. The energy-intensive nature of AI development and deployment, coupled with the emissions embedded in the manufacturing process, requires a strategic and collaborative approach to ensure that technological advancement does not come at the expense of planetary health. NVIDIA’s report serves as a stark reminder that the path to sustainable AI is a complex one, requiring not just innovation in computing power but also a profound commitment to environmental stewardship across the entire value chain. The coming years will be crucial in determining whether companies like NVIDIA can effectively navigate this challenge and pave the way for a more sustainable future for artificial intelligence.
Notes:
[1] Based on Worldometer’s CO2 emissions by country data, Lebanon’s annual GHG emissions in 2024 were 11,004,120 tons.
[2] Taiwan hosts more than 500 NVIDIA ecosystem partners and produces more than 1 million rack components for the NVIDIA Vera Rubin infrastructure. In South Korea, SK Hynix and Samsung Electronics are NVIDIA’s primary memory chip suppliers.
[3] According to the analysis by Greenpeace East Asia, the renewable electricity ratio among the top 20 manufacturing suppliers in East Asia was only 24.09% based on the latest Carbon Disclosure Project (CDP) questionnaire responses as of March 2026.
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