Bindu Sharma
Teradata
FinOps and cloud sustainability mutually support each other through a similar approach to conscientious and responsibility technology usage that enables workload efficiency toward sustainable outcomes that benefit our planet. If you are doing one of these – you are amplifying the other.
Climate change has increasingly become a political concern as it has become a more dominant voting issue for many citizens and a focus for action at an international level. This is resulting in regulations at national levels that place obligations on organizations and companies to report Greenhouse Gas (GHG) emissions. Business is seen as a fundamental part of the solution.
Many businesses are responding not only to growing customer demands, but also a realization that sustainability is not distinct to business but integral to it. Themes that were previously the concern of fairly marginal Corporate Social Responsibility (CSR) programmes are now ingrained into triple bottom line accounting which puts equal emphasis on people and the environment rather than exclusively monetary profit.
Businesses are reflecting on their purpose to acknowledge that they have a role to reform their internal operations and apply their unique skills and creativity in the innovation of a more sustainable future.
Global greenhouse gas (GHG) emissions from the tech sector are on par or larger than the aviation industry, at around 3% for ICT and 2% for aviation respectively. Within ICT, data centers consume around 1% of greenhouse gas emissions and global electricity usage (equivalent to 200-250 TWh). Industry analysts predict that these emissions will, unless addressed, rise to 10% of global emissions within a decade.
Currently, most cloud providers only provide basic calculations for energy or carbon emissions from cloud usage to their customers (typically their scope 1 & 2), which can be a challenge for organizations who want to baseline and reduce their carbon footprint across all scopes.
Measuring and understanding the GHG impact is the first step to management and mitigation. Carbon accounting (also known as carbon footprinting) is an exercise to develop an inventory of emissions across an organization, product or service. It typically involves creating a baseline which can be used to assess improvement over time.
The standards developed by the GHG Protocol are the most widely implemented frameworks for carbon accounting (used by 92% of Fortune 500 companies). Whilst carbon dioxide is the primary GHG emitted globally these methodologies consider other types and families of gases (e.g. methane, nitrous oxide, hydrofluorocarbons), which are measured based on their global warming potential (GWP) in equivalence to carbon dioxide (expressed as CO₂e).
The GHG emissions associated with the ICT sector were estimated at 730 million tonnes CO₂e in 2015. Parallels have been drawn with the aviation industry, which has comparable GHG emissions. Unlike the aviation industry, the nebulous, fragmented, and intangible nature of the internet and digital technologies have meant that these emissions have largely gone under the radar in terms of scrutiny and awareness. There have been substantial efficiencies in data centers in recent years, although this is pitted against ever increasing demand. The complexity of digital has presented challenges to carbon accounting, but the availability of data also presents opportunities that are not available to more traditional industries.
The difference between on-premise data centers and the cloud adds an interesting dynamic to GHG emissions and an organization’s accounting and reporting of it. In one sense cloud technologies simplifies reporting by shifting obligatory Scope 1 (e.g. refrigerant gasses) and Scope 2 (e.g. electricity from the grid) emissions that would be evident for on-premise data centers into Scope 3. However, the omitting of Scope 3 emissions is increasingly inadequate since although there is no direct control over the emissions there may be considerable influence that an organization can take in their reduction or management.
A challenge for measuring the emissions associated with cloud services is that traditionally the providers have been opaque about key metrics, particularly scope-3, with the big-3 providers all utilizing differing calculation models and providing varying levels of granularity in their data.
A core concept to GHG reporting under the GHG Protocol is that of scopes, which differentiate the different classifications of emissions (see EPA definition here):
From the cloud consumer perspective, all the hyperscaler emissions fall under the category of your scope-3, but from their perspective, they have their own scope 1, 2 & 3 emissions.
Scope 3 emissions are less tangible and are often described as ‘tricky’ to truly get a handle on – as exemplified by any movement from on-premise data centers to cloud services.
Most companies downplay their impact on carbon reporting or consider them out of scope because they are the responsibility of a supplier and/or customer. Increasingly however, companies are expected and recognise the value in reporting these emissions, even if they are unable to quantify them in their entirety
Scope 3 emissions make up a surprisingly high percentage of total emissions for many businesses, often the largest portion of the total. When food giant Kraft mapped out the sources of its own emissions, it found that over 90% of total emissions associated with the company were Scope 3 (Greenhouse Gas Protocol). This isn’t untypical; the best estimates place Scope 3 emissions somewhere between 80% and 97% of total emissions for a large business.
For a cloud provider Scope 3 emissions are estimated to account for more than 80% of their carbon footprint, with their scope 3 including significant carbon emissions from their core infrastructure and wider supply chain, including the manufacture of data centers, servers, storage, networking etc.
There are a number of benefits associated with measuring Scope 3 emissions. For many companies, the majority of their greenhouse gas (GHG) emissions and cost reduction opportunities lie outside their own operations.
So, while many businesses do focus solely on Scope 1 and 2, this means only tackling a small percentage of the emissions linked to your business. Ignoring the emissions in your value chain means that you will never get a grip on your company’s true carbon footprint. It’s a huge missed opportunity.
From an IT perspective, this is particularly true for large consumers of outsourced services such as those delivered by Amazon AWS, Google or Microsoft Azure. By measuring Scope 3 emissions related to external providers, organizations can:
This section gives FinOps practitioners an easy-to-use glossary and index of key terms, references, and an acronym list, including a list of common industry bodies and groups focused on sustainability.
Terms, Acronyms & Initialisms can be found on the Cloud Sustainability section on the FinOps Terminology page.
| Term | Full Wording | Description |
|---|---|---|
| ASDI | Amazon Sustainability Data Initiative | The Amazon Sustainability Data Initiative (ASDI) seeks to accelerate sustainability research and innovation by minimizing the cost and time required to acquire and analyze large sustainability datasets. ASDI supports innovators and researchers with the data, tools, and technical expertise they need to move sustainability to the next level. |
| CCAF | Center for Climate Aligned Finance | The Center was established by RMI to help the financial sector transition the global economy toward a zero-carbon, 1.5°C future |
| GHG | Greenhouse Gas Protocol | GHG Protocol establishes comprehensive global standardized frameworks to measure and manage greenhouse gas (GHG) emissions from private and public sector operations, value chains and mitigation actions. |
| GRESB | Global Real Estate Sustainability Benchmark | GRESB is a mission-driven and industry-led organization that provides actionable and transparent environmental, social and governance (ESG) data to financial markets. |
| GSSB | Global Sustainability Standards Board | The GSSB has sole responsibility for setting the world’s first globally accepted standards for sustainability reporting – the GRI Standards |
| – | The Carbon Trust | Providing solutions to the climate crisis and supporting organisations globally as they accelerate towards Net Zero. |
| – | Energy Star | A program run by the U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy (DOE) that promotes energy efficiency |
| – | The Green Grid | A nonprofit, industry consortium of end-users, policy-makers, technology providers, facility architects, and utility companies collaborating to improve the resource efficiency of data centers. |
| ITIC | Information Technology Industry Council | The Information Technology Industry Council (ITI)[1] is a Washington, D.C.-based global trade association that represents companies from the information and communications technology (ICT) industry. |
| PCAF | Partnership for Carbon Accounting Financials | An industry-led partnership to facilitate transparency and accountability of the financial industry to the Paris Agreement |
| RMI | Rocky Mountain Institute | RMI decarbonizes energy systems through rapid, market-based change in the world’s most critical geographies to align with a 1.5°C future and address the climate crisis. |
| SASB | Sustainability Accounting Standards Board | SASB Standards connect business and investors on the financial impacts of sustainability |
| SBTi | Science Based Targets Initiative | The Science Based Targets initiative (SBTi) drives ambitious climate action in the private sector by enabling organizations to set science-based emissions reduction targets |
| SDIA | Sustainable Digital Infrastructure Alliance | A nonprofit network of 100+ members & partners working across Europe and beyond to create a sustainable digital economy |
| TFCD | Task Force for Climate Related Financial Disclosure | To support the goals of the Paris climate agreement, the Financial Stability Board (FSB) created the Task Force on Climate-related Financial Disclosure (TCFD) in 2015. This voluntary disclosure platform was designed to “provide a framework for companies and other organisations to develop more effective climate-related financial disclosures through their existing reporting processes” and support “more informed investment, credit [or lending], and insurance underwriting decisions”. |
| UNFCC | United Nations Framework Convention on Climate Change | The United Nations Framework Convention on Climate Change established an international environmental treaty to combat “dangerous human interference with the climate system”, in part by stabilizing greenhouse gas concentrations in the atmosphere |
| WRI | World Resources Institute | WRI is a global nonprofit organization that works with leaders in government, business and civil society to research, design, and carry out practical solutions that simultaneously improve people’s lives and ensure nature can thrive. |
| WBCSD | World Business Council for Sustainable Development | The Partnership Platform is a global registry of voluntary commitments and multi-stakeholder partnerships made by stakeholders in support of the implementation of the Sustainable Development Goals (SDGs), and through various UN conferences and thematic action networks, including the UN Ocean Conference, the Small Island Developing States Conference, the UN Sustainable Transport Conference, the Rio+20 Conference, and others. |
| Term | Full Wording | ||
|---|---|---|---|
| Metric tons of carbon dioxide equivalents (mtCO2e) | Each measurement of greenhouse gas can be converted to metric tons of carbon dioxide equivalents by using that greenhouse gas’s global warming potential (GWP) factor. | ||
| kg of carbon dioxide equivalents (kgCO2e) | Each measurement of greenhouse gas can be converted to kilograms (kg) of carbon dioxide equivalents by using that greenhouse gas’s global warming potential (GWP) factor. | ||
| Litres of H2O consumed | Measurement for water consumption (commonly used in data centers) | ||
| MWh of electricity | Total megawatt hours (MWh) used from electricity | ||
| kWh of electricity | Total kilowatt hours (kWh) used from electricity | ||
| m3 of water | Typically, total water consumed in cubic metres |
Definitions above were retrieved from Microsoft and Wikipedia
Cloud Sustainability
