ne sustainable strategy that an ESG strategy should consider is using a green data center. If you decide to implement this strategy, you need to determine what types of services you will provide from a green data center and assess your current environment using ESG scores if you plan on providing cloud-based services or outsourcing your IT infrastructure management.
Does Your ESG Strategy Include a Green Data Center?
The environmental, social, and governance (ESG) movement is a powerful force for advocating for social and environmental causes. By growing their assets under management, ESG funds can provide investors with opportunities to engage in corporate governance and business practices that align with their values. ESG investors may consider the impact of data centers on their portfolios, as companies today rely on data centers for several business functions.
Data centers support an organization’s various functions, from human resources and customer relations to IT infrastructure. They connect these functions through data collected and stored in separate data center systems. These systems are then connected to the Internet for easy access to the information they contain by employees, customers, vendors, and anyone else interested.
Companies increasingly use renewable energy sources to power data centers to maintain efficient operations. In fact, according to recent reports from the United States Environmental Protection Agency (EPA), approximately 40 percent of large data centers use one or more renewable energy sources, such as solar, wind, or hydroelectric power.
As a result of increased sustainability efforts, many companies are increasing their use of green energy sources to power their data centers. Companies utilizing green energy see benefits such as lower costs, reduced emissions, and incentives provided by government entities, which can also drive higher valuations of ESG-compliant firms.
To improve corporate social responsibility (CSR), companies are turning to the ESG strategy. ESG is a way for businesses to measure their impact on society and the environment. ESG strategy is vital to any business plan, but it’s especially critical for companies that generate a lot of data.
The demands of environmental policy are increasing.
ESG is essential to long-term profits because there has been an increase in legislation that requires companies to report on the ESG factors in which they are involved.
The need for environmental policy is growing in more and more sectors. Companies are asked to reduce carbon emissions and address water use, resource efficiency, and waste management issues. The implications for IT departments are clear. A green data center strategy enables you to create a better work environment, provide your employees with the tools they need and save money simultaneously.
We know that new environmental policy demands are always coming out, and it can take time to keep track of what’s new. For example, California just passed a law requiring all new buildings over 1,000 square feet to have solar panels installed over the next decade.
We know how overwhelming this can feel, so we put together a list of the most recent changes in environmental policy that you’ll want to know about. If the law is fully implemented and no new gas-fired power plants are built, meeting the state’s requirements could reduce natural gas consumption by between 3 and 4 trillion Btu per year in 2030.
The growing concern for the environment has pressured companies to make improvements. More than 60 countries now have climate change legislation that requires companies to report how much carbon they’re putting into the atmosphere. More than 100 countries have adopted disclosure rules for oil, gas, and mineral extraction.
Blending sustainability with business will create unique opportunities.
The benefits of moving to a green data center could be immense. The most obvious benefit is the environmental impact that could result from the move. But another benefit for companies is the ability to differentiate themselves from their competition. Suppose a company can get ahead of its competitors by providing every one of its stakeholders—employees, customers, investors, and community members—with innovative solutions. In that case, it will be better positioned for growth well into the future.
A company’s sustainability strategy should be closely connected to business strategy to reap the rewards from both aspects of the ESG spectrum. A company’s sustainability goals should be integrated into its overall performance goals; if its goal is to increase profitability by 10%, it should aim for at least a 10% reduction in energy consumption. And even though saving money may not seem like an environmental benefit, it is an essential factor in a sustainable data center.
As costs decrease, companies will have more resources to implement other green technologies and practices. By incorporating sustainability into business strategies, companies can create opportunities they may not see or pursue.
Green data centers also utilize virtualization technologies to save energy. Virtualization allows multiple servers to share one physical server, thus reducing energy usage. Green data centers have proven themselves to be efficient in terms of power consumption, and that efficiency often means less wasted energy overall.
Suppose you’re incorporating more sustainable business practices like recycling or using more eco-friendly packaging. In that case, you’ll find that an efficient data center can keep up with all of your company’s needs and make doing so much less expensive than before.
Why Data Centers are Important to ESG Strategy
Carbon emissions significantly contribute to climate change, which is expected to lead to more extreme weather events and rising sea levels. The most significant source of carbon emissions is burning fossil fuels such as coal, gas, and oil. While the electricity demand is increasing, there remains a finite supply of fossil fuels. As a result, policymakers, investors, and concerned citizens are exploring ways to reduce carbon emissions.
Data centers are important because they help businesses store and process the ever-increasing amounts of data they need to run their operations. Data centers play a vital role in enabling technological advancement but also have substantial environmental impacts.
Given the critical work of data centers in global communication, there has been a rise in concerns over the carbon emissions that result from their use. A recent report by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory found that the number of servers in use worldwide is expected to double within four years, with data centers accounting for 2% of global greenhouse gas emissions today.
To mitigate these issues, companies can adopt an ESG strategy that considers using green data centers, which are data centers that make use of renewable energy sources, efficient cooling, and sustainable materials and resources.
Many large organizations already use energy-efficient server racks that preserve air circulation and reduce cooling costs. These advancements show a clear recognition of how data centers can be made more environmentally friendly and offer cost savings for these existing systems by using old technology to increase efficiency.
Start Using a Green Data Center
Data centers are essential to ESG management strategies because they can create significant carbon emissions through electricity. Carbon emissions are often the result of burning coal or other fossil fuels to produce power for businesses, which can negatively impact the environment.
By reducing emissions generated by data centers, companies can lower their overall carbon footprint—which can help them make good decisions that align with their ESG strategy as well as fulfill corporate sustainability objectives.
Green data centers are also ideal for creating sustainable energy and environmental practices. For these reasons, ESG strategy should consider investing in green data centers.
For a company’s data center operations to be as efficient and up-to-date as possible, they need to use green data center technology. With this type of data center technology, companies can work towards reducing their energy costs, which will also reduce their overall carbon footprint.
It can also reduce wasted time and resources because of the energy efficiency of green data center technology. A green data center can also greatly benefit businesses because it allows for better transparency regarding how customer and employee data is processed and used.
Green data centers are essential to ESG strategy because they reduce the carbon footprint of data center facilities. There are two main categories of green data centers. They can either be powered by renewable energy sources or operate with a lower carbon footprint.
Having a green data center means that it is built using sustainable and renewable energy sources, such as wind or solar power. This ensures that we keep natural resources for our energy needs and reduce greenhouse gas emissions from power plants.
Data centers can also adopt a low-carbon approach by reducing their carbon footprint through steps such as lowering their thermostat at night when much of the facility is in an idle state, which reduces both the amount of power used and heat output from the facility.
By implementing these strategies, data centers will have a lower carbon footprint than traditional facilities. They can help organizations maintain their corporate social responsibility, which is becoming increasingly important for large businesses in today’s economy.
As people become more aware of the potential of green technology, they will begin to look for ways to implement it. By offering these options at your company, you could open yourself up to a new consumer base that wants to support companies that care about the environment.