For many organisations migrating to cloud, the opportunity to run workloads from energy-efficient cloud data centres is a significant advantage. However, carbon emissions can vary from one country to another and if left unmonitored, will gradually increase over time as cloud use grows. This issue will become increasingly important as we move into the era of compute-intensive AI and the burden of cloud on natural resources will shift further into the spotlight.
The International Energy Agency (IEA) estimates that data centres are responsible for up to 1.5% of global electricity use and 1% of GHG emissions. Cloud providers have recognised this and are committed to change. Between 2025 and 2030, all hyperscalers – AWS, Azure, Google, and Oracle included – expect to power their global cloud operations entirely with renewable sources.
Chasing the Sun
Cloud providers are shifting their sights from simply matching electricity use with renewable power purchase agreements (PPA) to the more ambitious goal of operating 24/7 on carbon-free sources. A defining characteristic of renewables though is intermittency, with production levels fluctuating based on the availability of sunlight and wind. Leading cloud providers are using AI to dynamically distribute compute workloads throughout the day to regions with lower carbon intensity. Workloads that are processed with solar power during daylight can be shifted to nearby regions with abundant wind energy at night.
Addressing Water Scarcity
Many of the largest cloud data centres are situated in sunny locations to take advantage of solar power and proximity to population centres. Unfortunately, this often means that they are also in areas where water is scarce. While liquid-cooled facilities are energy efficient, local communities are concerned on the strain on water sources. Data centre operators are now committing to reduce consumption and restore water supplies. Simple measures, such as expanding humidity (below 20% RH) and temperature tolerances (above 30°C) in server rooms have helped companies like Meta to cut wastage. Similarly, Google has increased their reliance on non-potable sources, such as grey water and sea water.
From Waste to Worth
Data centre operators have identified innovative ways to reuse the excess heat generated by their computing equipment. Some have used it to heat adjacent swimming pools while others have warmed rooms that house vertical farms. Although these initiatives currently have little impact on the environmental impact of cloud, they suggest a future where waste is significantly reduced.
Greening the Grid
The giant facilities that cloud providers use to house their computing infrastructure are also set to change. Building materials and construction account for an astonishing 11% of global carbon emissions. The use of recycled materials in concrete and investing in greener methods of manufacturing steel are approaches the construction industry are attempting to lessen their impact. Smaller data centres have been 3D printed to accelerate construction and use recyclable printing concrete. While this approach may not be suitable for hyperscale facilities, it holds potential for smaller edge locations.
Rethinking Hardware Management
Cloud providers rely on their scale to provide fast, resilient, and cost-effective computing. In many cases, simply replacing malfunctioning or obsolete equipment would achieve these goals better than performing maintenance. However, the relentless growth of e-waste is putting pressure on cloud providers to participate in the circular economy. Microsoft, for example, has launched three Circular Centres to repurpose cloud equipment. During the pilot of their Amsterdam centre, it achieved 83% reuse and 17% recycling of critical parts. The lifecycle of equipment in the cloud is largely hidden but environmentally conscious users will start demanding greater transparency.
Recommendations
Organisations should be aware of their cloud-derived scope 3 emissions and consider broader environmental issues around water use and recycling. Here are the steps that can be taken immediately:
- Monitor GreenOps. Cloud providers are adding GreenOps tools, such as the AWS Customer Carbon Footprint Tool, to help organisations measure the environmental impact of their cloud operations. Understanding the relationship between cloud use and emissions is the first step towards sustainable cloud operations.
- Adopt Cloud FinOps for Quick ROI. Eliminating wasted cloud resources not only cuts costs but also reduces electricity-related emissions. Tools such as CloudVerse provide visibility into cloud spend, identifies unused instances, and helps to optimise cloud operations.
- Take a Holistic View. Cloud providers are being forced to improve transparency and reduce their environmental impact by their biggest customers. Getting educated on the actions that cloud partners are taking to minimise emissions, water use, and waste to landfill is crucial. In most cases, dedicated cloud providers should reduce waste rather than offset it.
- Enable Remote Workforce. Cloud-enabled security and networking solutions, such as SASE, allow employees to work securely from remote locations and reduce their transportation emissions. With a SASE deployed in the cloud, routine management tasks can be performed by IT remotely rather than at the branch, further reducing transportation emissions.
Setting and achieving Sustainability goals is complex in BFSI. To be truly sustainable, organisations need to:
- Reduce internal energy consumption and carbon footprint
- Fund the transition to decarbonisation in high emission industries
- Introduce “green” customer products and services
- Monitor carbon data for financed emissions
Data and AI have the potential to assist in achieving these objectives, provided they are used effectively. Here is how.
Download ‘Driving Sustainability with Data and AI in Financial Services’ as a PDF
Climate summits have attempted to reach a consensus and firm international agreements on emission reduction strategies. However, countries continue to lag behind in the climate promises – many do not back their ambitious targets with real, measurable steps.
With the UN Climate Change Conference (COP28) on the horizon, the world’s attention is fixed on how the conference can operationalise climate outcomes.
Read on to find out about the pivotal discussions and potential breakthroughs that COP28 holds in the global fight against environmental change.
Download ‘Eyes on COP28: Shaping the Direction of Global Climate Policy’ as a PDF.
In our previous Ecosystm Insights, Ecosystm Principal Advisor, Gerald Mackenzie, highlighted the key drivers for boosting ESG maturity and the need to transition from standalone ESG projects to integrating ESG goals into organisational strategy and operations.
This shift can be difficult, requiring an alignment of ESG objectives with broader strategic aims and using organisational capabilities effectively. The solution involves prioritising essential goals, knitting them into overall business strategy, quantifying success metrics, and establishing incentives and governance for effective execution.
The benefits are proven and significant. Stronger Customer and Employee Value Propositions, better bottom line, improved risk profile, and more attractive enterprise valuations for investors and lenders.
According to Gerald, here are 5 things to keep in mind when starting on an ESG journey.
Download ‘Embedding Sustainability in Corporate Strategy and Operations’ as a PDF
Organisations in Asia Pacific are no longer only focused on employing a cloud-first strategy – they want to host the infrastructure and workloads where it makes the most sense; and expect a seamless integration across multiple cloud environments.
While cloud can provide the agile infrastructure that underpins application modernisation, innovative leaders recognise that it is only the first step on the path towards developing AI-powered organisations. The true value of cloud is in the data layer, unifying data around the network, making it securely available wherever it is needed, and infusing AI throughout the organisation.
Cloud provides a dynamic and powerful platform on which organisations can build AI. Pre-trained foundational models, pay-as-you-go graphics superclusters, and automated ML tools for citizen data scientists are now all accessible from the cloud even to start-ups.
Organisations should assess the data and AI capabilities of their cloud providers rather than just considering it an infrastructure replacement. Cloud providers should use native services or integrations to manage the data lifecycle from labelling to model development, and deployment.
In this Ecosystm Byte, sponsored by Oracle, Ecosystm Principal Advisor, Darian Bird presents the top 5 trends for Cloud in 2023 and beyond. Read on to find out more.
Download ‘The Top 5 Cloud Trends for 2023 & Beyond’ as a PDF
As an industry, the tech sector tends to jump on keywords and terms – and sometimes reshapes their meaning and intention. “Sustainable” is one of those terms. Technology vendors are selling (allegedly!) “sustainable software/hardware/services/solutions” – in fact, the focus on “green” or “zero carbon” or “recycled” or “circular economy” is increasing exponentially at the moment. And that is good news – as I mentioned in my previous post, we need to significantly reduce greenhouse gas emissions if we want a future for our kids. But there is a significant disconnect between the way tech vendors use the word “sustainable” and the way it is used in boardrooms and senior management teams of their clients.
Defining Sustainability
For organisations, Sustainability is a broad business goal – in fact for many, it is the over-arching goal. A sustainable organisation operates in a way that balances economic, social, and environmental (ESG) considerations. Rather than focusing solely on profits, a sustainable organisation aims to meet the needs of the present without compromising the ability of future generations to meet their own needs.
This is what building a “Sustainable Organisation” typically involves:
Economic Sustainability. The organisation must be financially stable and operate in a manner that ensures long-term economic viability. It doesn’t just focus on short-term profits but invests in long-term growth and resilience.
Social Sustainability. This involves the organisation’s responsibility to its employees, stakeholders, and the wider community. A sustainable organisation will promote fair labour practices, invest in employee well-being, foster diversity and inclusion, and engage in ethical decision-making. It often involves community engagement and initiatives that support societal growth and well-being.
Environmental Sustainability. This facet includes the responsible use of natural resources and minimising negative impacts on the environment. A sustainable organisation seeks to reduce its carbon footprint, minimise waste, enhance energy efficiency, and often supports or initiates activities that promote environmental conservation.
Governance and Ethical Considerations. Sustainable organisations tend to have transparent and responsible governance. They follow ethical business practices, comply with laws and regulations, and foster a culture of integrity and accountability.
Security and Resilience. Sustainable organisations have the ability to thwart bad actors – and in the situation that they are breached, to recover from these breaches quickly and safely. Sustainable organisations can survive cybersecurity incidents and continue to operate when breaches occur, with the least impact.
Long-Term Focus. Sustainability often requires a long-term perspective. By looking beyond immediate gains and considering the long-term impact of decisions, a sustainable organisation can better align its strategies with broader societal goals.
Stakeholder Engagement. Understanding and addressing the needs and concerns of different stakeholders (including employees, customers, suppliers, communities, and shareholders) is key to sustainability. This includes open communication and collaboration with these groups to foster relationships based on trust and mutual benefit.
Adaptation and Innovation. The organisation is not static and recognises the need for continual improvement and adaptation. This might include innovation in products, services, or processes to meet evolving sustainability standards and societal expectations.
Alignment with the United Nations’ Sustainable Development Goals (UNSDGs). Many sustainable organisations align their strategies and operations with the UNSDGs which provide a global framework for addressing sustainability challenges.
Organisations Appreciate Precise Messaging
A sustainable organisation is one that integrates economic, social, and environmental considerations into all aspects of its operations. It goes beyond mere compliance with laws to actively pursue positive impacts on people and the planet, maintaining a balance that ensures long-term success and resilience.
These factors are all top of mind when business leaders, boards and government agencies use the word “sustainable”. Helping organisations meet their emission reduction targets is a good starting point – but it is a long way from all businesses need to become sustainable organisations.
Tech providers need to reconsider their use of the term “sustainable” – unless their solution or service is helping organisations meet all of the features outlined above. Using specific language would be favoured by most customers – telling them how the solution will help them reduce greenhouse gas emissions, meet compliance requirements for CO2 and/or waste reduction, and save money on electricity and/or management costs – these are all likely to get the sale over the line faster than a broad “sustainability” messaging will.