Point of View

The Big Green Monster Is Back to Punish Your Lousy Cloud Carbon Footprint

November 22, 2018

Before you know it, your cloud carbon footprint is going to be as important as how you treat your employees, how you address diversity and the gender pay gap in the workplace, and how reliably you pay your suppliers.

 

Greenpeace advises that the IT sector’s energy footprint consumes approximately 7% of the world’s electricity. As businesses push more services and processes to the cloud, it’s high time for enterprise leaders to make sure their cloud infrastructure is not only the most reliable and scalable, but also the most environmentally friendly—or else risk a PR catastrophe—especially if they were aware of their options to reduce their carbon footprint and deliberately ignored them.

 

Why it’s your responsibility to assess your cloud carbon footprint

 

The reality is cloud is now big business—and those warehouses packed with servers—are chewing through energy… a lot of it. Growing demand for cloud services—and the increased reliance on high-compute technologies in the enterprise—will see the amount of energy consumed by industrialized data centers increase. And with that, their carbon footprint will become a much higher priority for governments, watchdogs, and the public. While it falls on cloud services providers to put a squeeze on energy efficiency to boost margins now, the conversation will undoubtedly find its way into their client’s board room. In the same way enterprises were expected to “go green” and boost energy efficiency across their estate, they will now be expected to hold their providers to account. Already organizations such as Greenpeace are assessing the green credentials of the major providers; enterprise leaders should use this information to make sure their partners green credentials are up to par.

 

 

Being environmentally responsible will arrive at the top of the corporate agenda—with much more impact than the earlier wave

 

Green IT is by no means a new fad. Even as recently as the early 2000s, enterprises were under increasing scrutiny to get their environmental credentials in order. However, more often than not, this resulted in negligible increases to energy efficiency as opposed to any significant changes to energy consumption and recycling of IT hardware. Simply put, Green IT did little more than encourage a new breed of office militants to shame colleagues who had left their monitors switched on over the weekend. Like getting rid of plastic straws to eliminate plastic waste in the ocean, turning monitors off was a good thing to do, but not anywhere near enough to reverse the overall problem.

 

Soon after the global financial crisis, even this skin-deep attempt to “go green” had mainly petered out as more immediate challenges—such as keeping the firm’s head above water in a recession—took precedence. But now, with a generation of younger, more socially conscious employees and consumers hitting the economy—and industrialized IT computing making it easier to spot the good, the bad, and the ugly of enterprise environmental policies—this big green monster is rearing its head again.

 

It took just one TV documentary to highlight the detrimental use of single-use plastic—it’s only a matter of time before cloud factories face similar scrutiny

 

It doesn’t take much to fire up an almost vitriolic public response these days, particularly when it involves the environment. A documentary displaying the impact plastic waste has on the ocean led to the almost immediate banning of several single-use items, from drinking straws to plastic micro-beads in beauty products. And this isn’t all down to David Attenborough’s dulcet tones; we are just more in touch with the damage we’re doing to the environment. Social media and digital communication channels can turn up the pressure on enterprises almost instantly.

 

Now we’ll dust off our prediction hat: Enterprise cloud infrastructure may be the next target for the unrestrained scrutiny of the public. Here’s why.

 

Cloud technology is no longer a mystery – as stories of public outcry and local defiance bring more publicity to social and environmental impact

 

Cloud isn’t the mysterious technology it used to be. In many ways, it has been pushed into the public mindset through a mixture of data-breach scandals and an increased reliance on cloud services to support consumer technologies. A more recent development that’s moved cloud factories and server farms into the public consciousness is the growing enthusiasm for crypto-currency mining and the huge amounts of energy it consumes. The energy impact of Bitcoin mining is perhaps most profoundly felt in the small island nation of Iceland. HS Orka, an Icelandic energy firm, estimates that it diverts more utility resources to bitcoin mining operations than to heat and power homes. Jóhann Snorri Sigurbergsson, a spokesman for HS Orka, argued that if all proposed Bitcoin mining factory projects are realized, the nation “won’t have enough energy for it.”

 

It doesn’t take much of a leap for the public to spot the similarities between a factory dedicated to mining Bitcoin and one used to support business services.

 

Demand for cloud services will only continue to grow, making public scrutiny inevitable

 

And here is the crux of the problem: Enterprises are relying more on technology than ever just to keep the lights on, which increasingly means pushing services and workflows over to the hyperscale cloud providers. Our research indicates that cloud spend will increase from $46bn in 2018 to over $88bn by 2022, and we can expect this dynamic to continue. We’ve even made a similar assertion to argue that most AI, blockchain, and analytics projects touted by companies must be smoke and mirrors, because if all of them were genuinely in progress, we wouldn’t have the cloud capability or, importantly, the energy utilities to keep up with the demand.

 

So, it’s now more important than ever to dig into the details of your cloud provision. At scale, the cloud is often far more energy efficient than if all these IT services were run on-premise , but that’s not the point. If a locale comes under energy pressure because a server farm has upped its operations and your firm is one of their main clients, the public is hardly likely to say, “Well, that’s okay because they migrated from less efficient on-premise services.” Instead, they’ll be pushing your PR department to explain why your environmental policy isn’t keeping pace with the impact your firm is making.

 

Opposition to data centers isn’t new. The Republic of Ireland, a prized location for data centers, has seen its fair share of public resistance. Even leviathan firm Apple was held up by the opposition of one environmental advocate concerned about the pressure a planned 240-megawatt data center project would put on the local and national electrical grid.

 

Energy is the biggest overhead for many cloud providers, so energy efficiency is a priority for them too

 

This issue isn’t new, and the big cloud providers are already pushing for greener services. Not out of philanthropy, but because energy consumption is often the main core expense for mature centers and it interferes with their profitability and capacity to compete with cheaper rivals. Amazon Web Services, for example, is on a constant development journey to squeeze more processing power out of every watt of energy consumed. All three of the main hyperscale cloud providers—AWS, Microsoft, and Google—are pushing for carbon neutrality by powering Data Centres with renewable energy and driving more processing efficiency to deliver more with the same or reduced consumption.

 

Greenpeace recognizes the impact the industrialized public cloud has on the environment and works to bring transparency to the green credentials of all of the global hyperscale cloud firms through its annual #ClickClean report.

 

Exhibit 1: Greenpeace’s ClickClean report

 

 

Source: GreenPeace.org ClickClean report

 

In Exhibit 1, we can see the output from the report covering these 15 hyperscale cloud providers. It digs into the energy used to power data centers and the level of efficiency and mitigation taken by the firms. If we pick out just the four big hyperscale players that we usually focus on in the IT services space, IBM, and AWS scrape by with a passing mark for their final grade, Microsoft grabs a B, and Google sits at the top of the class with an A.

 

Bottom line: Environmental policy will push further up the priorities list, so pick your partner wisely.

 

According to Greenpeace, not all cloud players are equally committed to green credentials. Enterprise leaders should bring their environmental policy into the selection process to ensure not only that the cloud player ticks the core business case boxes, but also that you are mitigating the impact you are having on the environment and reducing the risk of potential public outcry being aimed at your firm.

 

In many ways this is the crux of the argument: enterprises need to drive the conversation and push for greater environmental standards and transparency amongst major cloud providers. In doing so, they will be core stakeholders in the conversation. Without enterprises driving the conversation now we can expect industry watchdogs to start vetting cloud providers on their behalf. In many areas this is already the case, enterprises look to S&P ratings to check the credit worthiness of suppliers. At the other end of the spectrum there are a plethora of ‘best places to work’ and ‘top employer’ rankings to separate the wheat from the chaff. Soon an entire ecosystem of watchdogs will emerge around the environmental credentials of cloud providers, joining the steadfast work of Greenpeace and many others to bring transparency and accountability to a major section of the digital economy. Enterprises and providers alike must make sure they’re willing stakeholders as this space develops.

 

In this high stakes game, providers must work harder to:

 

  • Increase the percentage of their tech estate which is fueled by renewable energy: Many of the major hyperscale cloud players are already investing in renewable energy supplies, but more work is needed to mitigate the environmental impact of growing demand for processing power.
  • Drive greater efficiency: For many providers energy consumption is the greatest expense, so they are naturally committed to building more efficient products and services. However, this is far from the case for all of them. Many need to spend an equal amount of time driving efficiencies as they develop capabilities.
  • Take a lead in the conversation: The provider community needs to take the lead and bring this conversation to the fore, pushing for greater transparency in their peers’ environmental footprints and recognizing that environmental impact holds the same social weight as data security.

 

Enterprises also have a role to play, and can put pressure on providers to do more by:

 

  • Refocusing the conversation away from cost: Undoubtedly cost will always be a factor, but this can bite enterprises impacted by environmental scandals further down the road. Enterprise leaders must push providers to do more to up their environmental pedigree.
  • Add environmental credentials to the table stakes: The environmental credentials of providers must be included in the shortlisting process  and make sure providers are able to articulate a roadmap for their continued work to drive down environmental impact.
  • Drive innovation: Push providers to innovate and come to engagements with fresh ideas for how they, and you, can help mitigate the impact of technology on the environment.

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