Putting sustainability first to sustain your business!
We now live in a world where the topic of sustainability permeates much of our daily lives. The press and media are full of stories related to climate change and carbon emissions, companies are pledging net-zero targets over the next decade, governments are meeting to discuss carbon reduction measures and the planet is seeing drastic changes in weather patterns and increases in extreme events.
That said, you might be wondering…
- But what does net-zero mean, and how do you get there?
- What part does IT and the supply chain have to play in this topic?
- How do organizations assess their green status and take measures to be more sustainable?
Good questions! Why don't we tackle these areas and take a look at the impact they will have on a company's futures?
Let's start with some terminology.
Net-zero or carbon neutrality is a state of net-zero carbon dioxide emissions, achieved by balancing emissions of CO2 with its removal by offsetting with green energy sources and other practices.
To calculate CO2 emissions, the Greenhouse Gas Protocol (GHG) published their Corporate Standard first edition in 2001. This defined three scope areas of emissions that companies should track across their value chain. In rough terms this translates as follows:
- Scope 1 covers direct emissions produced by the company. The majority being fuels burnt.
- Scope 2 covers indirect sources such as emissions from power sources.
- While Scope 3 refers to all emissions from products and services purchased by the organization.
The following diagram outlines the key areas within each Scope category.
Over the last 10 years, Scope 1 and 2 emission reporting has become mandatory as part of any publicly traded companies annual report. Scope 3 is currently voluntary and is difficult to track due to the nature of the categories included. This presents a challenge for any net-zero targets, as Scope 3 emissions can make up as much as 99% of a company's total emissions.
Here's an analogy…
To better understand the challenge with Scope 3 emission tracking consider the categories within your own home.
Scope 1 and 2 can be measured by taking readings from the gas and electric meters, along with any fuel purchased for your vehicles.
Scope 3 however, would include everything else that exists within the home. From furniture, white goods, gadgets, cutlery, the wallpaper and paint on the walls, to all clothes and produce purchased, and literally everything else you can see right now in your home.
For businesses, this challenge presents itself as the Sustainable Supply Chain. The need to make responsible purchases that are measured and tracked for their emissions.
Knowing your CO2 emissions is becoming critical for investment criteria too. Wealth managers are assessing organizations on their sustainability credentials, and net-zero strategies. This will determine the investment suitability in parallel to the valuation.
So, what are the options to get to a net-zero position?
There are three key options to look at:
- Reduce your emissions at source.
- Offset the emissions by planting trees or investing in other green initiatives.
- Pay for carbon credits to make the problem go away.
Reducing emissions in Scope 1 and Scope 2 is within the control of businesses. This is broken down into several areas shown in the diagram below.
What does this mean from an IT and data center perspective?
Taking each category in turn, let's consider some activities in each area.
Behavioral and operational efficiencies.
Most energy waste comes from poor use of the resources we already have. Increasing utilization of storage and compute will avoid overbuying and wastage of idle systems. Balancing workloads across the data center to optimize resources. Monitor consumption at the rack level and distribute resources evenly. Turning the lights off when you leave the room... All these areas have solutions available today along with automation and optimization services.
Plant and equipment upgrades.
Older, less efficient systems are the next contributor. Moving to modern flash-based storage arrays can reduce emissions tenfold! Modernizing infrastructure and removing technical debt will increase efficiency significantly. Similarly, the physical data center can be upgraded with hot/cold aisle containment, switching to DC power and other efficiency measures.
Depending on the location and environment, it may be possible to add power generation to the data center. Solar panels and wind turbines are increasingly being used to power some or all of the data center locally.
If electricity cannot be self-generated, then supply from a renewably sourced provider will provide clean energy.
Last but not least, any remaining emissions not reduced above will need to be paid for in offset schemes or carbon credits.
This is just a snapshot of some of the ways businesses can tackle Scope 1 and Scope 2 emissions, so what of Scope 3?
As stated earlier this is much harder to measure, and lack of data and data quality is the current issue. Being able to get data on the goods and services you buy at point of sale would be a huge benefit. It also introduces a new factor in procurement evaluation. That of the "greenness" of the chosen product. This will lead to competitive selection of equipment based on the manufacturing process, and the miles travelled to acquire. Providing local sourcing options, and proof of recycled materials in purchases will differentiate VARs, distributors and OEMs.
The following diagram shows an example of the Scope 1, 2 and 3 emission distribution for Apple Inc.
As can be seen in Apple's case, 99% of emissions are Scope 3 and the majority of those from their manufacturing process. Apple has reduced its Scope 2 emissions to zero by purchasing 100% renewable electricity.
At the time of writing, Scope 3 emissions are a voluntary addition to the annual report. But for how long? And will you really be net-zero by 2030/2050 if you don't start accounting for these now?
*This article is the first in a series to be published on the topic of sustainability, ESG reporting and the circular economy. WWT is focusing on helping our customers achieve their carbon emission reduction targets.