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Apple, Rio Tinto in Advance Talks to Cut Carbon Footprint

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Per a Reuters report, Apple (AAPL - Free Report) and Rio Tinto are looking to advance their relationship by developing a carbon-free project, which was first announced last year.

While the complete picture is not clear, Rio Tinto is expected to replace the existing aluminum extraction technology across its entire fleet with a new one. The company, which has promised to reduce its carbon footprint by 2050, will use the latest extraction technology if it is viable for commercial production.

Notably, in May 2018 Alcoa (AA - Free Report) and Rio Tinto came together to create Elysis. The joint venture backed by Apple is set to develop an aluminum extraction process that will emit oxygen instead of greenhouse gases, which cause harm to the environment.

The process, which uses ceramic anodes instead of carbon anodes to eliminate the release of harmful gases, is anticipated to begin production and sale by 2024.

Apple, Alcoa and Rio Tinto and governments of Canada and Quebec have decided to jointly invest $144 million for the development of the project. Additionally, the iPhone-maker will provide necessary technical support for the transition.

Apple Inc. Revenue (TTM)


Apple Goes Green

Apple is consistently making efforts to achieve its clean energy goals, especially as aluminum is a key element in many of its products.

Prior to this, the company achieved its goal of powering its facilities and offices with renewable energy. Additionally, Apple’s 23 supplier partners committed (as of April 2018) to achieve the same goal.

Moreover, Apple is helping companies like Akamai Technologies (AKAM - Free Report) , Etsy and Swiss Re achieve their renewable energy goals by providing them access to high capacity renewable energy projects.

Notably, Facebook was the first of tech giants shifting toward clean energy sources, followed by Google and Microsoft. In 2018, Facebook and AT&T accounted for the highest consumption of renewable energy.

Benefits of Shifting to Clean Energy

Apple’s shift to clean energy sources is anticipated to reduce costs in the near term, which is a positive. The company’s strategy to buy clean energy for a long period, up to 20 years, is expected to give it better understanding of the energy rates in the long term. Additionally, Apple can eliminate any unwanted fluctuations in price driven by demand and supply factors.

Moreover, adherence to environmental, social and governance (ESG) practices is expected to boost investor confidence and increase loyalty.

Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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