Editor’s note: The following is a guest post from Miguel Angel Borrega, senior director analyst at Gartner.
Environmental sustainability is becoming a top business priority, with a recent Gartner survey indicating that sustainability ranked among CEOs’ top 10 priorities for 2022.
Organizations determined to reduce their environmental impact must focus on the sustainability of their IT initiatives, including their cloud and edge infrastructure.
Most IT organizations are aware of the environmental benefits of cloud service offerings to achieve sustainability objectives, but few include sustainability as criteria when selecting a cloud service provider. However, Gartner predicts that by 2025, the carbon emissions strategies of hyperscale cloud providers will be a top-three criterion in cloud purchase decisions.
Shifting between cloud service providers is a long, complex and costly process. It is essential that organizations undertake a careful analysis of providers’ current environmental sustainability efforts and roadmap now, to avoid getting stuck with the wrong sustainability partner.
1. Discuss cloud service providers’ sustainability goals
Before engaging with any service provider on sustainability, IT leaders must understand their organization’s sustainability objectives and timelines. This will enable the organization to identify cloud service providers aligned to their goals.
The most critical question IT leaders must ask is how and by how much cloud service providers will reduce emissions associated with services the enterprise will consume.
The response should relate to both the service provider’s own operations and that of its supply chain, as well as how the provider can guide the enterprise in the use and configuration of consumed services.
Ask prospective cloud service providers about their environmental sustainability commitments and goals, including planned due dates and current level of achievement.
Ideally, providers will partner with a sustainability organization to audit these goals to certify the information provided.
2. Evaluate energy efficiency, renewable use and resource effectiveness
When assessing cloud service provider sustainability, evaluate metrics across various criteria.
First, consider power usage effectiveness (PUE) of a cloud data center. PUE is a standard metric that shows the overhead of air conditioning and power distribution infrastructure — the largest source of data center inefficiency.
World-class data centers have a PUE around 1.1, while anything over 1.6 usually has room for improvement. Discuss with providers their current PUE metrics and what sustainability innovations might improve upon PUE.
Next, investigate whether cloud providers have achieved energy efficiency certifications by third parties. This can demonstrate a provider’s level of capability and commitment to sustainability goals.
Many certifications can differentiate cloud providers, such as Leadership in Energy and Environmental Design (LEED) within data centers or ISO 50001 to demonstrate the provider has implemented an energy management system.
Examine providers’ use of renewable energy. Ask cloud service providers what percentage of energy consumed in the regions relevant to the enterprise’s consumption of cloud services comes from renewable resources.
The global number is helpful, but not as transparent as a country or regional view.
Measuring water use effectiveness (WUE) is also important, as water plays an essential role in cooling data centers. WUE tracks all sources of water used to cool data centers and is based on metered flow from utilities.
Most hyperscalers are not currently sharing this information publicly, but they plan to include it in future ESG reports. Ask providers about their WUE and what actions they are taking to reduce water consumption.
From a circularity perspective, cloud services are inherently better than on-premises data centers because product ownership is retained by the provider, which has the scale, commercial interest and capabilities to invest in circularity practices.
Recycling certifications demonstrate a commitment to circular economy principles in energy use management, recycling, refurbishing and asset disposal. Ask how providers design platforms and service offerings for circularity, how much e-waste they produce annually, and how much material is properly recycled.
3. Inquire about greenhouse gas emissions
Finally, IT leaders must understand how cloud service providers report and manage greenhouse gas (GHG) emissions.
The international standard for greenhouse gas emissions reporting is the GHG Protocol which breaks emissions into three scopes. Contextualized for cloud services, these are:
- Scope 1. Direct emissions from assets the enterprise owns and operates that produce a GHG emission. For IT, that typically is limited to backup diesel generators.
- Scope 2. Emissions from grid electricity generation used for data center operation, including air conditioning and power distribution.
- Scope 3. A broad category of emissions outside the direct control of the enterprise. These encompass the embodied carbon of all the purchased physical goods and services, packaging and external network services. For cloud service providers, these can be as high as 50% of the provider’s total greenhouse gas emissions.
Cloud service providers have the most direct control over Scope 1 and Scope 2 emissions. This is where they will start when looking to reduce emissions, typically through energy efficiency programs and use of renewable energy.
However, the balance of GHG emissions associated with the delivery of infrastructure as a service (IaaS) cloud services is most impacted by Scope 3 upstream emissions.
The most material Scope 3 issue is the embodied carbon involved in the manufacture of the hardware platforms used to deliver cloud services. This is difficult to measure and manage, and typically is not included in cloud providers’ service footprint estimation tools.
How the cloud service provider is managing and reducing its Scope 3 emissions is a strong indicator of its sustainability maturity. Cloud service providers can influence Scope 3 emissions through design and material choices and how they manage their supply chain.
This includes how they design platforms to optimize circular outcomes, such as extending the life of platforms and reusing and recycling materials.
The most important part of any enterprise’s GHG emissions strategy relates to its reduction in total emissions. Where a cloud service provider is targeting such goals as net zero, carbon neutral and carbon positive, it will be investing in voluntary carbon offsets as it approaches its target date.
Ask cloud service providers how they manage and/or reduce their Scope 3 emissions. Review reductions in emissions for Scopes 1, 2 and 3 over the last five years to confirm they’re making reasonable efforts to reduce emissions. Favor providers with targets and timelines that closely align to those of the enterprise.
