Going green: Data centres

Environment, Social and Governance (ESG) continues to be a key focus area for businesses and governments around the world, with climate goals coming due in 2025-2030, energy prices remaining high and scrutiny of how businesses conduct themselves continuing to be a priority for investors, lenders and regulators. Taking the time to tackle these pressures now, can help a business protect itself from the rising rate of emissions and, ultimately, continue to see positive gains in climate action.

Businesses are increasingly considering their carbon footprint and identifying their key sources of carbon and using this information to assess what suppliers to work with to limit the carbon impact of their supply chain. Recently, we have seen the growth of AI, machine learning and automation as tools used by businesses to increase profits and reduce their climate impact. As a result of this, there is a growing pressure to ensure that the hosting of the data that sits behind these tech solutions is as green as possible.

In our islands, access to green energy is expanding, through direct access, purchase power agreements or even “do it yourself” building of solar panels on offices. This gives the opportunity for the data centres in our islands to stand out from the crowd and offer a truly green service.

Green data centres (DCs) impact at least nine of the UN’s seventeen SDGs and can be used as an opportunity to enhance an existing ESG strategy and contribute towards an organisation’s ESG targets.

In the technology space, the concept of an eco-friendly data centre by design has been widely discussed. A green DC is a conventional data centre that has been designed (infrastructure, location, fittings, equipment) for maximum energy efficiency and lowest contribution towards environmental impact.

Currently, data centres are consuming around 3% of global energy. The latest technological breakthroughs by key industry players and pureplay data centre operators have helped to keep the electricity demand flat and shape the compelling value proposition that operating in a green DC offers.

Some of the latest advancements in green DC’s are:

1. Green Power: Typically, data centres have relied on operational efficiency metrics to reduce the cost associated with running a data centre and address sustainability concerns. However, with the rapid growth of the internet user base and increased business use, pureplay datacentre players have begun to experiment and innovate around green power procurement models.
2. Waste Recycling: The excess heat dissipated in the data centres can be recycled to other energy systems for utilisation. For data centres located in the Crown Dependencies, with cooler climates, the excess heat can be transported to nearby buildings (District Heating). This has been achieved in-practice by Bahnhof in Sweden to pump the excess heat to nearby district buildings. Bahnhof has also been successful in monetising the opportunity by collaborating with the local district authorities.
3. Use of IoT, AI, ML for forecasting energy use: Leading technology players have been successful in deploying a strategic combination of Internet of Things (IoT), Artificial Intelligence (AI), and Machine Learning (ML) to bring down the Power Usage Effectiveness (PUE) metric of their datacentres. Using DeepMind AI, Google have achieved 40% reduction in energy used for cooling and 15% reduction in overall energy use.

Data centres are cost driven. Although greening a data centre will incur upfront capital costs, in the long run it will reduce operational expenditure and improve efficiency. Besides the operational advantages, switching to green data centres will have other direct tangible benefits such as an enhanced brand image and a compelling value proposition to offer to clients.

For many customers, a strong ESG performance is an important factor that drives business decisions. In scenarios where a client's data is hosted in green DCs, the sustainability benefits driven from these eco-friendly centres can be passed on to the end consumers, benefiting the businesses and most importantly the environment.

For more information on green data centres, please get in touch.

(Article adapted from KPMG UK's Going Green: Data Centres piece from Iakov Fedoseenko and Irvashi Yadav: Green Data Centre - KPMG UK)