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Why sustainability-minded enterprises need to look at emissions generated across the entire value chain

Tate Cantrell explores why enterprises looking to mitigate the environmental impact of operations must also measure and mitigate the carbon emissions generated outside the four walls of their business, as published in Digitalisation World

Just two years ago, in 2019, an Informa (now Omdia) study found that while data centres were using 3 percent of the world’s electrical supply, on average, energy efficiency ranked fourth on IT leaders’ list of priorities when building or leasing a data centre. Furthermore, most of those surveyed as part of the study did not know the power usage effectiveness (PUE) of the data centres they used.

FAST FORWARD TO NOW, and sustainability is certainly top of mind. Climate change did not stop for Covid-19; the UN has reported that atmospheric CO2 concentrations not only showed no signs of peaking last year, but that they have continued to rise to new levels. Plus, although it might not have halted climate change, one thing the pandemic did serve to do is place the data centre industry under the microscope. 

Rapid digitalisation driven by remote working, remote shopping, remote socialising and so on has meant closer scrutiny for the IT industry and in particular for data centres, being as they are a crucial component of the digital economy.

As well as a wider appreciation for the internet itself for facilitating our work and social lives while distanced from one another, there now exists a much broader understanding of just how power-intensive the IT industry is. According to some estimates, even before the pandemic began the IT industry accounted for as much as 3.7 percent of global greenhouse emissions. 

Whether it’s due to intensified scrutiny of their operations, or due to genuine concerns around corporate social responsibility, many companies are publicly committing to cut their carbon emissions and improve the overall environmental friendliness of their operations. For example, Apple has committed to making its supply chain carbon-neutral by 2030. The key thing to note about Apple’s promise is that it refers to its entire supply chain. This means that Apple will need to measure the carbon emissions generated by its entire value chain, not just from within the walls of the company itself.

In order to ascertain how to decrease and mitigate the effects of their carbon emissions, enterprises need a standardised method of measuring their carbon emissions. The Greenhouse Gas Protocol (GHGP) supplies the most widely recognised international accounting and reporting standards for greenhouse gases. It sets out the emissions generated by a companies’ operations into three ‘scopes’, all of which contribute to a business’s overall carbon footprint.

Scope 1 indicates all emissions generation directly from owned or controlled sources.

Scope 2 emissions are those indirectly generation from energy purchased by the company.

Scope 3 emissions refers to all other indirection emissions.

This means emissions generated by all activities not owned or controlled by the reporting organisation, but that the company indirectly impacts in its value chain. Many companies don’t count on finding that the majority of greenhouse gases occur outside of the four walls from where they conduct their business but in fact, it is these indirect emissions that are the most important to consider when looking at reducing a carbon footprint. And crucially, this group includes those emissions produced by externally hosted high performance computing.

As soon as a company passes on computing to an external data centre, the emissions generated by that activity become Scope 3 emissions. It is for this reason that companies looking to improve the environmental friendliness of their operations have to ensure they place their particularly power-intensive data centre operations under the microscope. As an example of how power-hungry HPC can be, the carbon emissions released each day by the ICON weather forecasting algorithm is over 2.3 million gCO2e, equivalent to flying from New York to San Francisco four times (per 2020 University of Cambridge research).

On a positive note, energy efficiency in data centres is increasing at a rapid rate. The IEA reports that energy consumption has remained flat for the past three years, while – as we know – workloads and internet traffic have grown rapidly. Since most of the low-hanging fruit in the area of data centre efficiency has already been picked – such as better airflow management strategies for more efficient cooling and increased server virtualisation to reduce electricity consumption – it will continue to be more challenging to be able to offset the increase in ICT workloads with gains in energy efficiency alone. As a result, we do expect that ever-greater computing workloads will cause the IEA reports to show an upsurge in energy consumption in the years to come. Therefore, the only obvious way to realise the benefits of computing growth in a truly sustainable manner is to match the rise in ICT workload energy with a corresponding increase in the usage of renewable energy sources – particularly with respect to HPC, which is one of the largest areas of growth in the ICT sector.

The good news for companies looking for data centres to host their HPC is that advances in renewable energy such as microgrids and power purchase agreements (PPAs) means that it’s now a viable and comprehensive option for powering HPC. As 80 percent of all hardware does not need to be placed near the end-user with regards to latency and accessibility, enterprises can choose to locate their HPC somewhere that has access to abundant renewable energy. Plus, data centres that source their energy from a resilient grid powered by renewable sources can have very predictable energy costs. For example, foreign companies using electronically provided services in Iceland can be offered an electricity tariff by a data centre provider that is fixed for 10 years or more, which also allows for long-term financial planning. These fixed costs mean enterprises don’t need to choose between profitability and sustainability when it comes to HPC.

Locating HPC where it can be powered by renewable energy is not only viable, but an attractive, cost effective option for enterprises looking to implement truly sustainable practices across their operations. With ever-growing attention being paid to GHG emissions across the entire enterprise value chain, it certainly seems that the time for organisations to commit to sustainable HPC has come, or else risk being left behind.

This article was originally posted at Digitalisation World and is reprinted here with permission.