Surface issues: understanding IT’s impact on the planet
Companies tend to underestimate the greenhouse gas emissions attributable to their technology. Such miscalculations could hamper their net-zero efforts
Businesses must take drastic action if the United Nations’ net-zero goals are to be achieved and catastrophic global warming is to be avoided. But, while there is real urgency behind firms’ efforts to cut their energy consumption, use more sustainable materials and produce less physical waste, they tend to overlook the greenhouse gas (GHG) emissions associated with their IT estate.
In fact, while half of companies claim to have an enterprise-wide sustainability strategy in place, according to a survey by the Capgemini Research Institute, only 18% have a comprehensive sustainable IT strategy with clear goals and timelines.
This is a serious oversight. A research report published by McKinsey & Co last year estimated that enterprise technology emits about 340 million tonnes of GHG annually, accounting for approximately 1% of global output. While that may not sound like a significant proportion, it equates to half of the carbon footprint imposed by aviation, an industry under great pressure to reduce its environmental impact.
Data centre decarbonisation
The pace of technological change and the desire for more computing power means the environmental toll of enterprise IT will only increase without urgent action. The Massachusetts Institute of Technology has calculated that training a single AI model can produce nearly five times the GHG emitted by an average American car over its lifetime, for instance.
Alexandra Smith is a founding partner at FuturePlus, part of The Sustainability Group. She observes that AI systems, “particularly deep learning models, require massive computational power, which draws huge amounts of energy. They therefore impose a significant carbon footprint.”
The data centres and transmission networks used by these models already account for more than 1% of global electricity consumption, according to the International Energy Agency. Despite a huge uptick in demand for digital services over the past decade, there have been rapid improvements in the energy efficiency of data centres, but more still needs to be done.
Big tech is acutely aware of this. Hyperscalers have at least consolidated a considerable portion of the world’s data centre capacity, making it easier to apply sustainability measures on a large scale. Google, for instance, has pledged to use totally carbon-free energy in its data centres by 2030. And more than 100 organisations operating in Europe’s data centre sector have signed a pact to make their infrastructure climate-neutral by 2030.
Yet Smith feels that they still lack a clear path to decarbonisation, especially given that most centres lose efficiency at temperatures exceeding 32C. Their cooling requirements, as heatwaves become ever more prevalent, “remain a huge issue”, she says.
End-user device impacts
The McKinsey research report estimates that the carbon footprint of data centres could be only half the size of that imposed by enterprise end-user devices such as laptops, smartphones and printers. The manufacture, transport, use and disposal of all these devices has a huge environmental impact. Much of this kit is discarded when still perfectly serviceable, while only a small proportion is recycled properly.
Many vendors of electronic equipment are legally required to offer a free takeback service, but “the collection rate of small devices such as mobile phones is still low”, reports Sophie Tuson, senior associate at law firm RPC and a lead in its environment and climate-change practice.
Smith notes that the wider adoption of circular-economy principles could mitigate the environmental impact of end-user devices. Products should be designed “for longevity and durability” in a closed-loop system where materials are continually reused, refurbished, remanufactured and recycled, she says.
Tuson adds that industry initiatives such as the Circular Electronics Partnership are indeed “driving coordinated action by some of the biggest names in tech to help identify and scale up circular business models and designs to reduce waste”.
But, given the sheer scale of the problem – about 50 million tonnes of e-waste are generated worldwide each year – more effective solutions are urgently needed.
Greener software and global action
Enterprise software also has a huge, yet relatively hidden, impact on the planet.
“There has long prevailed an implicit assumption that ‘producing digital goods must automatically mean being green’. This has been a far too black-and-white assumption that’s now being questioned.”
So says Annu Nieminen, founder and CEO of The Upright Project, which has designed and built a model that can measure an enterprise’s net impact on the planet.
She continues: “Understanding the true environmental footprint of any company relies on access to good-quality data. This has typically been hard to come by, for companies themselves as well as for investors and the media. The lack of good data means that we’ve had an insufficient understanding of the real footprint of IT and digital infrastructure.”
At least the number of tools to help companies tackle this issue and track GHG emissions arising from their cloud and software usage is growing. So-called green coding practices, which encourage firms to write computer programs in ways that minimise software energy consumption, are also emerging.
International forums are paying greater attention to tech’s environmental impact too. The United Nations’ COP28 climate conference, for instance, will include a “green digital action” track focusing on decarbonisation.
The dichotomy here is that technology is both a cause of climate change and a vital tool for addressing it. Artificial intelligence serves as a prime example: although AI has an undoubted environmental impact, it could also help to make electricity grids and data centres more efficient.
Addressing the environmental impact of technology is evidently a complex and multilayered challenge. But, if enterprises want to truly reduce their carbon footprints and achieve their net-zero goals, it’s one they must rise to – and soon.
Eco-nomics: four business benefits of going green
Although some companies still view adopting sustainable practices as a costly and inconvenient exercise, it could actually do wonders for their bottom lines
Signs asking guests to reuse towels and forgo daily bedsheet changes have become a common sight in hotels. Usually, they suggest that this small action will help to save the planet, but such initiatives can also be good for the hoteliers’ finances.
In 2014, when linen reuse schemes were starting to become standard practice in the US, the American Hotel and Lodging Association estimated that they reduced the number of laundry loads – as well as the related labour, water and energy costs – by 17%. Since then, it’s become even more obvious that sustainability also makes good business sense.
In fact, any organisation that aims to improve its ESG score at the same time as growing revenue and profits is likely to outperform its peers on more conventional measures.
“Half of these ‘triple outperformers’ reached or exceeded 10% annual growth between 2017 and 2021 – a period where only one in every four companies passed that benchmark,” says Sascha Lehmann, a partner at McKinsey, citing the findings of its recently published Courageous Growth research report.
This tallies with the idea of net-zero economics: that fully embracing sustainability in a bid to reach net zero can deliver significant business benefits. Here are four key advantages that illustrate the concept.
Switching to energy-efficient lighting, heating, ventilation and air-conditioning systems can dramatically reduce electricity consumption, leading to lower utility bills. Energy-efficient devices also tend to last longer and require less maintenance, reducing their operating costs.
Johann Franke, a director at the Marakon consultancy, adds that using “renewable energy to power facilities and data centres can have lower costs and less volatility associated with it and, eventually, pay for itself”.
By deferring the purchase of new equipment to better manage, optimise or redeploy existing kit, a firm will both save money and reduce waste. Indeed, organisations can achieve cost savings of up to 60% simply by increasing their use of such equipment from three years to five, according to research by Gartner.
Sector-specific efforts to improve resource efficiency generally lead to long-term financial gains. Nike, for instance, came up with a way to weave textiles in its footwear more efficiently, reducing the amount of fabric and labour time needed to make each shoe. This has cut the firm’s materials and transport costs, while significantly reducing the amount of waste going to landfill.
When ecommerce firm ESW surveyed more than 16,000 shoppers in 16 countries at the end of 2022, it found that 83% considered sustainability when making purchasing decisions. Moreover, 64% said they had changed their shopping behaviour significantly to lessen their own impact on the environment.
Companies that show a strong commitment to the future of the planet are best placed to attract these eco-conscious customers, thereby increasing sales and market share, notes Alexandra Smith, a founding partner at FuturePlus, part of The Sustainability Group.
“Consumers increasingly demand sustainable products and services, so businesses that demonstrate sustainability can benefit from greater customer loyalty and a stronger brand reputation,” she says.
In fact, studies suggest that consumers in all age groups are willing to spend more for greener products. The potential increase in revenue this represents could even help firms offset the cost of changing processes or materials to make their operations more sustainable.
Focusing on sustainability could open up new sources of investment, as Sophie Tuson, senior associate at law firm RPC and a lead in its environment and climate-change practice, explains.
“An increasing number of investors are considering the wider social and environmental impact of the companies they invest in. That’s not only about the bottom line; it’s also because they see their investments as a powerful way to drive positive change,” she says. “Businesses that can demonstrate real progress on sustainability are therefore a more attractive target for this growing breed of ‘pro-social’ investors.”
Saskia Hassefras is a senior sustainability consultant at EcoAct, part of the Schneider Electric Sustainability Business. She believes that firms aligning themselves with initiatives such as the European Green Deal “not only position themselves as contributors to a low-carbon future but also ensure their adherence to standardised sustainability practices. This reinforces their attractiveness to investors and facilitates their access to finance aligned with global sustainability goals.”
Highly skilled people increasingly want to work for companies that share their environmental concerns. Demonstrating a strong commitment to sustainability should help employers to attract and retain such talent, granting them the kind of competitive edge that leads to increased revenue, according to Hassefras.
“Millennials are expected to make up three-quarters of the global workforce by 2025,” she says. “A survey conducted by Bupa last year showed that one in three would turn down job offers from companies with poor ESG credentials.”
An organisation’s strong performance on sustainability can also have a positive impact on morale, which helps to reduce staff turnover and the various costs associated with it. This can lead to significant savings over time.
Cooling the core: transforming the data centre
Air cooling systems in data centres have an outsized environmental impact. Precision Liquid Cooling offers a more sustainable alternative
In many ways, data centres are the foundation on which modern society is built. These sprawling facilities enable the seamless flow of information that powers ecommerce, social networks, cloud computing and many other services. But the digital economy’s relentless growth is taking a heavy toll on the environment.
Although the industry has been making efforts to curb the energy requirements of data centres, these still use more than 1% of the electricity consumed in the world each year. Some of the largest facilities also use up to 22 million litres of water a day – as much as a town of 50,000 people. That’s because air cooling systems typically require a lot of water to absorb heat.
The carbon embodied in the components of a data centre – a process that occurs upstream during the extraction of metals such as copper, lithium and cobalt; the manufacture of components; and their transport around the world – is also significant.
With all these factors in mind, do enterprises truly understand the environmental impact of their data centre requirements?
“There are fundamental business benefits from good sustainability,” says David Craig, CEO of Iceotope. “But I don’t think industry is always well equipped to understand those, because many of the total-cost-of-ownership models are very poor or the interaction between IT and infrastructure is siloed.”
He adds that certain sectors are at least trying to take the initiative. For instance, some financial services providers have become “very clear in their requests for quotations that they want ‘net zero by 2030’ from their vendors”. Nonetheless, such practices are still far from the norm in most industries.
If the United Nations’ net-zero targets are to be achieved, urgent action is required to clean up data centres. Cooling is a vital aspect of data centre operations, consuming approximately 40% of the total electricity used.
Liquid cooling is rapidly becoming the solution of choice to efficiently and cost-effectively accommodate today’s compute requirements. However, not all liquid cooling solutions are the same. Direct-to-chip appears to offer the highest cooling performance at chip levels, but because it still requires air cooling, it adds inefficiencies at the system level. It is a good interim solution to cool the hottest chips, but it does not address the longer-term goals of sustainability, serviceability and scalability. Meanwhile, tank immersion offers a more sustainable option at the system level but requires a complete rethink of data centre design.
Iceotope’s Precision Liquid Cooling technology combines the best of both technologies. It uses dielectric liquid coolant as a heat-transfer medium, eliminating the need for large, energy-intensive air-conditioning units and fans.
“What we currently have is a vicious cycle of consumption: hot, cold, hot, cold,” Craig says. “The simple fact is that liquids are thousands of times better than air at transferring heat.”
With Iceotope’s solution, a small amount of dielectric coolant is precisely targeted to remove heat from a server’s hottest components, ensuring maximum efficiency and reliability. There are no hot spots that can slow down performance. No physical space is wasted on unnecessary cooling infrastructure and the need for water is minimised. Liquid cooling can reduce energy and water consumption by up to 40% and 90% respectively, according to the company.
Crucially, Iceotope’s technology can easily be retrofitted to existing data centre racks, avoiding the need to build new infrastructure.
“We think it’s really important that the user experience feels as close as possible to what it was before and then is enhanced,” Craig says.
The system can also cool high-density racks effectively, meaning that more servers can be packed into the same space and still perform to a high standard. This inherent scalability makes Precision Liquid Cooling a potentially game-changing technology for the data centre industry, particularly as traditional air cooling methods are reaching their limits.
Indeed, most servers run at a fraction of the full capacity because of the constraints of air cooling technology. It’s simply not up to the task of meeting the cooling demands of next-generation hardware and workloads. The high-density processors supporting artificial intelligence applications, for instance, result in much higher power consumption across data centre workloads.
“We can always extend air cooling a bit more – and there are good reasons why people want to do that,” Craig says. “They’ve invested billions in a technology and they’ve got all sorts of financial rates of return they need to hit, so there is a lot of incrementalism. But, if the data centre industry can’t wean itself off air cooling, it will absolutely fail to tackle its consumption issues.”
As well as being sustainable and scalable, Precision Liquid Cooling improves data centre serviceability. Doing away with server fans significantly reduces the rate of component failure, for instance. Precise delivery of dielectric fluid also reduces thermal stress, while an enclosed chassis makes Iceotope’s units impervious to gas, dust and humidity, making them ideal for edge computing use cases. It also enables longer server life refreshes in humid climates and opens up brownfield sites that couldn’t be considered by operators previously.
The shift away from air cooling is already under way, but liquid cooling is often being implemented as part of a hybrid approach. By fully embracing solutions such as Iceotope’s, the data centre industry stands a much better chance of becoming truly sustainable by 2030.
ESG expectations and actions
Back in 2020, 66% of consumers in a McKinsey & Company survey said that they consider sustainability when they make a purchase, but is there evidence of action?
Turning the tide: why is sustainable change so elusive?
Environmental pledges have become the norm in business, but truly impactful change is proving hard for many firms to achieve, particularly when it comes to their technology
In theory, most business leaders would like their enterprises to become environmentally sustainable operations, but this doesn’t always translate into meaningful action, especially when it comes to greening their IT estate. Why is it proving so hard for firms to turn good intentions into genuinely impressive results?
First and foremost, the “emphasis on quarterly earnings reports and rapid returns among investors can create hurdles for firms pursuing sustainable development strategies that require a longer-term perspective”. So says Anuj Saush, European leader of the ESG centre at the Conference Board, a non-partisan global think-tank.
The desire among companies to use the latest tech to gain an edge on their rivals can also run counter to green objectives, notes Saskia Hassefras, senior sustainability consultant at EcoAct, part of the Schneider Electric Sustainability Business.
“Businesses are continuously seeking high performance in the IT environment. That’s often achieved through cutting-edge technology and frequent upgrades, thereby contributing to energy-intensive operations,” she says.
In other words, while up-to-date technology is crucial for meeting operational requirements and staying competitive, it can increase a firm’s digital carbon footprint.
In fact, notes Hassefras, business decision-makers “may perceive a trade-off between performance and environmental responsibility”.
The fear factor
Fear of change can also get the better of good intentions. IT is the beating heart of many organisations – as operationally vital as their employees. Streamlining the IT environment in the name of sustainability could cause a catastrophic outage or security breach – or so the C-suite nightmare goes.
“The high dependency on technology requires the establishment of a robust infrastructure capable of withstanding disruption. This often involves redundant IT. While such resilience is crucial for maintaining operations, it can pose a barrier to sustainability,” Hassefras explains.
The high perceived capital expenditure required to decarbonise IT is another significant obstacle. But a failure to invest now could lead to bigger bills in future, she notes, adding: “The initial investment may be viewed as a hurdle, but it’s crucial to recognise the long-term benefits, including reduced operational costs through energy efficiency. Shifting the perspective to see these investments as strategic measures for sustainability and cost-effectiveness can help to overcome this perceived barrier.”
The data dilemma
Even when businesses manage to overcome IT cost or resiliency fears associated with sustainability, they can struggle to identify areas that are ripe for improvement. For instance, only 27% of organisations have established the true carbon cost of their IT operations, according to the Capgemini Research Institute, while 29% are using carbon assessment tools.
A general lack of high-quality data makes it hard for organisations to create a sustainable tech strategy with well-defined goals and target timelines. Even when they do manage to get some sort of handle on the scope-one and scope-two greenhouse gas emissions associated with their IT, those that fall under scope three are much harder to pinpoint.
“Measuring emissions that an organisation is indirectly responsible for up and down its value chain is a particularly challenging puzzle that many chief information officers are trying to solve,” reports Daryl Elfield, a KPMG UK partner specialising in ESG tech and data. “The absence of a universal standard for benchmarking; the lack of supplier engagement; the limited availability of data; and the risk of greenwashing mean that it can feel impossible for them to evaluate suppliers’ ESG credentials accurately.”
Tools for success
Nonetheless, there is a small but growing kit of tools designed to help organisations measure their IT’s environmental impact. KPMG, for instance, uses technology that can accurately measure the lifetime digital carbon emissions of software. Enterprises that want to get serious about IT decarbonisation could also use widely available information to develop a benchmarking system for vendors.
“Publicly disclosed data, such as metrics reported by suppliers in their annual CSR reports, can be analysed alongside public unstructured data in addition to data from questionnaires that are normally conducted when onboarding a supplier,” Elfield says. “By bringing all this together into one system, you can analyse, measure and compare the ESG performance of suppliers.”
Tackling resiliency fears may prove even more of a challenge, but that’s not insurmountable. By conducting thorough assessments of the potential risks of moving to a sustainable IT environment, developing contingency plans and adopting robust testing procedures, business leaders with green ambitions should be able to overcome any resistance from their colleagues.
If expertise is lacking internally, another option would be to work with vendors and consultants who understand the complexities of creating a more sustainable IT environment and have the skills to help make it happen. While that may involve some cost, the price of inaction amid the climate crisis could be even higher.