Cloud companies and datacenter operators are taking strides towards cutting down on their water and carbon footprints. Still, corporates need to acknowledge the environmental impact of undergoing such a massive digital transformation.
The world has transformed into a predominantly digital one. However, the earth’s resources are finite. As a result, any significant trade-off between sustainability and digital transformation must be counted with care, and not just measured in terms of the value to society and business, but also the cost to the earth.
In the pre-pandemic era, sustainability and digital transformation often appeared at the top of the business agenda. However, the latest research from Dassault Systèmes, conducted with Tech-Clarity, found coronavirus causing 38% of organizations globally to pay less attention to environmental sustainability, while 18% put it on hold completely.
The same survey revealed that 46% of organizations had enhanced their focus on their digitization goals.
The trend is understandable and hugely beneficial. While this may seem like businesses are neglecting the planet, but focusing on immediate priorities, going digital is the right thing to do.
Greener data and a cleaner cloud
Any COVID-induced conflict of interest among the drivers of sustainability and digital transformation needs resolution; however, with environmental expectations growing, it will not be easy. The first potential conflict that needs resolution is the carbon footprint of the digital infrastructure itself.
As per the International Energy Agency, datacenters account for around 200 terawatt-hours of electricity consumption in 2019, towards 1% of global use. However, global internet traffic surged by almost 40% between February and mid-April this year.
Some cloud providers and data centers remain cleaner and greener than others. Even if it is true that datacenters are energy-hungry, many of the big cloud providers, including AWS and Google, are now meeting much of their energy needs from renewable solar and wind.
Water-cooling and the circular economy
Carbon is definitely not the sole metric of success applicable to sustainability and digital transformation. Much of the energy consumed by data centers globally is driven by the cooling system when water stress incrementally increases the climate-risk factor.
It should be remembered that offsetting or cutting carbon emissions is not the same thing as decreasing energy consumption or boosting its generation.
The global need for affordable clean energy is mounting, but the supply is not yet abundant. So energy-hungry datacenters eat up supplies of renewables, leaving less green electricity for sustainably powering cars and heating industries.
Carbon blindness in the c-suite
Seeing this unavoidable symbiosis of digital transformation and sustainability, the ruling question is whether corporates are really being careful. A lack of clear understanding of the potential risk of digital waste, can create carbon blindness in the C-suite.
Executives are considering environmental impact at the build and design stage, which is a good thing, although more to do with lowering operating costs than carbon emission.
The ongoing impact lies where the real danger exists, as energy and water become increasingly scarce. To strike the right balance, a holistic view is the need of the hour.
The differentiating drivers among all C-level executives are their roles and responsibilities based on key performance indicators (KPIs) associated with greenhouse-gas reporting.
The drivers of compliance and KPIs at the board level lead to the C-suite examining the true environmental impact of their ongoing digital efforts. It is also vital to ensure that the message gets communicated well down the hierarchy.
Carbon pollution is a market failure. It is an externality that must be priced to ensure those responsible for bearing the costs, therefore driving investment, innovation, and business practice.