With every new introduction to the digital economy, we require more technical infrastructure, which in turn leads to a greater environmental impact. The latest culprit? AI. Many companies are blaming AI for significantly increasing their energy consumption. For example, Google claimed its 48% increase in emissions since 2019 was due to the energy demand of AI.
But data makes the world go round. So, when the data centers that host the world’s storage, computing and AI capacities come under fire for their environmental impact, which they so often do, business leaders are left concerned over how to scale and succeed whilst still being sustainable. The poor reputation of data centers' energy consumption is pushing many organizations to ask about sustainability first when purchasing cloud storage.
In Wasabi’s 2024 Cloud Storage Index survey of IT decision-makers, sustainability was a must-have when choosing a cloud storage provider. Showing its tremendous influence, sustainability was selected as a higher priority than price, scalability and even performance. The results show that, while previously sustainability may have been a nice-to-have, it’s now an essential on the checklist for business leaders.
The landscape is clearly evolving. Due to regulatory pressure, customer’s environmental concerns and an overarching desire to support the planet, prioritising sustainability keeps a business competitive in today’s environment. Now it’s a matter of understanding what sustainable data use looks like, and if it’s possible.
Vice President and General Manager for EMEA at Wasabi.
Going green is a legal matter
Part of the reason board members are prioritizing sustainability is because of the regulatory pressure to do so. Legal bodies across the globe are beginning to force businesses to take carbon emissions seriously or face legal repercussions. Environmental, social and governance (ESG) data is being held to the same standards as financial data and companies will be held accountable for their impact on the planet. With the Corporate Sustainability Reporting Directive (CSRD) coming into action across Europe, 50,000 global companies must make their ESG data public, some as early as next year. A key component of CSRD is Scope 3 emissions - which focuses on indirect emissions of a company’s value chain. This includes emissions from a company’s entire tech stack.
With the regulatory landscape changing, businesses are having to adjust. According to Bain and Company, only 24% of executives feel they are prepared to comply with upcoming sustainability requirements. For many organizations, a lack of transparency from their third-party providers inhibits their ability to build a comprehensive picture of their climate impact. Tech vendors, including cloud providers, must deliver reliable tools, metrics, and programs to help customers better identify their contribution to the overall carbon footprint. If cloud providers can put a number on the carbon footprint from a customer’s storage use, it’s added to the accounting of that organization's downstream environmental impact and can assist in establishing a more sustainable future for generations to come.
A transparent future is a sustainable future
Unfortunately, many of the hyperscalers in cloud storage are notorious for obfuscation. Recent reports have brought attention to how the largest energy consumers in tech are not revealing their true emission levels, although you wouldn’t know it from the companies' own communications. Big Tech takes advantage of the discrepancies in climate reporting; they are able to claim the label Net Zero through investments in various clean power schemes whilst still polluting millions of tons of CO2. But how are these offset strategies factored into their customers’ carbon footprint calculations?
Willingness to shed light on the back end aside, both the scale and age of their infrastructure makes it much more difficult to provide granular and sophisticated emissions reporting. If your storage provider is someone other than the big three hyperscalers they are more likely able to point to the specific location in the specific data centre where your information is being stored and therefore know exactly how much power you are consuming. As we know sustainability is a key factor when choosing a cloud provider, customers are demanding transparency. The providers willing to work together with their customers to understand consumption and emissions will be the ones who succeed in the eco-conscious market of the future.
More sustainable thank you think
In general, cloud storage gets a bad rep when it comes to climate impact because of the energy consumption of data centers. While the electricity required to power cloud storage is undeniable, another important factor to consider within sustainability is waste. Cloud is the least wasteful storage solution because of its high optimization of computing and storage capacity. Data centers allow us to do the most amount of work possible with a given amount of power. There is a strong incentive for any unused space in a data center to be sold to a customer, therefore eliminating any wasted capacity. Consider that the average hard drive uses around 7 watts of power, regardless of whether the disk is full or empty— further to eliminating waste, high utilization also improves energy efficiency.
This means that the bigger a data center becomes, the more energy efficient it will be. Thanks to the economy of scale, by contributing to big data centers getting bigger you are bringing down the carbon footprint per terabyte. Therefore, sustainable-minded cloud customers are best selecting the established competitor compared to the startups.
Today’s world is built around the digital economy; cloud storage is the best available option for powering the digital economy in a sustainable manner. As an immense amount of data is a non-negotiable for running a successful business and we need infrastructure to store and use it— data centres are here to stay. The focus instead should be on what is a justifiable use of the electricity and resources. When customers are constructing their sustainable-first storage strategy they must also ask themselves which workloads are worth the energy consumption; the role of the cloud provider is to meet that demand in the most sustainable and transparent manner possible.
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