The Environment as an Imperative

About 15 months ago we made a prediction.

“COP26 has been the most urgent we have seen yet, with governments, businesses, and individuals all hearing and responding to scientists’ calls for expedient action to protect our ways of life. We will see this imperative running through RFPs and procurement choices in 2022, and I predict that Cloud Service Providers (CSP) will be required to share a metric of their carbon footprint and details on their green agenda.”

There were already plenty of clues pointing us towards this assertion. SAP had found that the thousands of organisations it polled were “overwhelmingly motivated” to take environmental action. And Gartner’s 2022-23 CEO priorities report told us that, for the first time ever, CEOs were placing environmental sustainability in their top 10 business priorities. In fact, 74% agreed that increasing environmental, social, and governance (ESG) efforts attract investors towards their businesses, and among the 80% who intended to invest in new or improved products over the next two years, environmental sustainability was cited as the largest driver.

But 2022 was an unexpectedly tricky ride for many organisations (Neil has written here before about the triple squeeze—high inflation, talent scarcity and supply chain issues), so does it still matter at all?

Deep into 2022, Capital Group was still hearing that 90% of the companies that it polled were adopting ESG solutions, which was a marked increase from previous years. And in our day-to-day conversations with European businesses, the appetite to improve sustainability posture has never really abated. 

In fact, while some predicted that more tricky economic times would lead to a reduction in resources available for sustainability efforts, I am hearing that leaner times are actually having the opposite effect. Business leaders are working out that what’s good for the planet may actually be good for them too. Strong environmental credentials appeal to consumers, driving sales. McKinsey reported that more than 70% of consumers would pay more for products with good environmental credentials. And reductions in energy usage (particularly in a world where energy costs are spiraling) impact positively upon both environmental targets and the bottom line. Sustainability efforts can also reduce operational costs, making it a wise business focus, through uncertainty in the economy.

Of course when we are talking about organisational environmental efforts we are talking about cross-departmental targets, but let’s not underplay the centrality of IT.  

Globally, data centres account for more than 3% of the global electricity supply. That’s more than the UK’s entire annual electricity consumption. And cloud computing has a larger carbon footprint than the airline industry; a surprising fact for many who eschew long haul flights but give no thought to the impact of their social media addiction. 

So what exactly are organisations starting to do? We shall tell you a few things, but do not expect a straightforward answer.

1. Organisations are reducing their environmental impact by moving to the cloud. What? Didn’t we just tell you that cloud computing has a huge carbon footprint?  Yes, we did, but if we were to move all that data, services and processing back out of the cloud and run them in private data centres and on local devices, the situation would be significantly worse. 

2. Many data centres are turning up the thermostat and allowing the space to become warmer. The argument has long been held that warmer temperatures do not materially impact hardware performance and so there is little justification for air cooling below 20 degrees Celsius (some of the hyperscale data centres are now sitting as high as 30 degrees). However, this discussion isn’t yet resolved as there is now some evidence that while energy consumption drops because of a reduced requirement for extensive air conditioning, computing hardware does in fact draw more energy when it is warmer. This one will rumble on for a while yet, and Peter Judge at DataCentre Dynamics covers the latest thinking pretty thoroughly here.  The other data centre technology to keep an eye on from a sustainability perspective is closed loop cooling, which is replacing raised floor systems in many cases. In a closed loop system, the cooled air is recycled. It is more effective to run, uses significantly less energy, and is also actually more efficient in transferring heat away from sources of emission.

3. Both of the points above show the complexity of environmental discussion and prove that benchmarking and measurement are key to improvement. Savvy CIOs are starting to realise the centrality of their role in collecting, sharing, and analysing accurate and traceable data, to drive sustainability efforts. Without strategic data collection and management, we will all be operating in the dark when trying to determine if all our best efforts are making the slightest difference. 

4. The final thing I am seeing emphasised is waste reduction. Sometimes that means reducing packaging or reconditioning and donating end-of-life hardware (reducing landfill waste). Sometimes it’s looking at your supply chain and asking critical questions about where things are coming from—and where you need them to go (got a single remote worker on a different continent? Maybe avoid a hardware solution that requires global physical distribution…).  Bear in mind that the biggest gains can often be achieved as part of a transformation project, and may be driven by a different primary goal. Could re-architecting your security and networking infrastructure reduce waste?

Neil’s prediction from 2021 has dated well, but we have no doubt that the finer details of these more specific points will run into greater challenges in their efforts to remain up to date by the back end of 2024. Yet it is worth keeping up with the experiments and successes of peers. All the science points to a shortening timeframe available for us to get things right and start making the requisite changes before our way of life is irreparably damaged. 

If you’d like to learn more about the ESG efforts at Netskope, read this blog about our recent Silver Medal rating from EcoVadis.