Author: Selena Nimerick, Vice President of Customer Service and Quality, Schneider Electric's Critical Power Business
The need for digitalization is growing today, and all business processes are expected to be carried out in an efficient and fluid manner. For data centers, although their energy consumption accounts for only 1-2% of the world's total energy consumption, their energy consumption and carbon emissions are more than 3 times faster than other industries, with a significant "multiplier effect", so efficiency improvement is the first step to achieve sustainable development in this industry. For years, the data center industry has focused on the energy efficiency dimension, which can be summed up simply as how to "use less." But now that the trend of social industry has shifted, the strategic focus of most industries has shifted to sustainable development. Many companies use the terms efficiency and sustainable development interchangeably, but in practice the United Nations defines sustainable development as "a development approach that meets the needs of present generations without compromising the needs of future generations". Based on this definition and taking into account the stakes of our industry, we cannot stop at the level of "using less", but must do better. In a new white paper by Schneider Electric, it discusses four key drivers that data center operators, particularly colocation service providers, should prioritize for sustainability.
Meet the requirements of your hosting tenant
As the leader of Schneider Electric's Customer Satisfaction and Quality team, I always put understanding our customers' needs first so that we can meet their current and future needs. With this in mind, the white paper argues why sustainability should be the first driver to meet customer needs.
According to the latest data from 451 Research, hosting tenants are beginning to require suppliers to make commitments to sustainability in their contracts. As companies, including the Internet giants, adopt managed services while publicly committing to net zero emissions, they will be required to disclose their other indirect emissions (Scope 3), known as emissions from suppliers, including from managed service providers. In fact, the industry generally believes that Scope 3 emissions are underestimated, so more needs to be done to address Scope 3 emissions from managed service providers. To enhance Scope 3 emissions reporting, data center operators can require their suppliers to disclose environmental product (Type III) certifications to document their products' hidden carbon footprint.
In addition to reporting Scope 3 emissions, tenants are also looking to renewable energy and alternative fuel source energy suppliers to reduce their direct emissions (Scope 1) and indirect emissions related to energy use (Scope 2) through power purchase agreements (PPAs). Circular economy solutions, such as parts and battery recycling, are attractive for waste reduction and material reuse programs. Schneider Electric's Energy & Sustainability Services business unit works closely with customers to help businesses, including the world's largest data center operators, negotiate PPAs to reduce emissions. In 2020, we helped our customers reduce co2 emissions by 134 million metric tons.
Measuring and reporting emissions helps ensure that we are mutually accountable for our role in the ecosystem and seek new opportunities for sustainable development.
Comply with government regulations
The second key driver that managed service providers should make sustainability a top priority is compliance with government regulations.
Government agencies have closely monitored the data center industry for many years due to behaviors in the data center industry, including the use of chemical coolants in HVAC equipment, the use of sulfur hexafluoride gas (i.e. SF6), and plant expansion and resource utilization management plans. So for data center operators, understanding the environmental impact of these factors and having appropriate sustainability programs in all areas is of great benefit to operational development.
In the case of SF6, for example, as an artificial fluoro-containing gas, SF6's properties make it ideal as an insulating medium and has been used for decades in medium voltage (MV) switchgear in data centers and other applications. Unfortunately, however, because it is the greenhouse gas with the strongest greenhouse effect, it has seriously accelerated the development of global warming. In fact, the gas is expected to remain in the atmosphere for 3200 years. Governments have now taken action to reduce the use of SF6-containing equipment. In response, companies are already developing alternatives that do not contain SF6.
As more government agencies issue sustainability recommendations, these recommendations could become new industry regulatory requirements in the future. For more information on SF6 and its alternatives, read Schneider Electric's white paper "SF6-free Combined with Digital Technology to Build a Low-Carbon and Efficient Grid"
Drive business value
At the beginning of this article, we discussed that hosting tenants are looking for hosting service providers that can empower them for sustainability. This leads to a third driver: increasing business value. Developing a strong sustainability action plan is undoubtedly a competitive advantage as it has become part of corporate marketing and brand value. However, the business value of sustainability goes far beyond marketing.
As The Quality Leader at Schneider Electric, the company's strong system resilience gives me peace of mind, which has led me to worry about data center operators who are losing sleep due to various levels of downtime. Today, more efficient and innovative sustainability solutions can accelerate data center performance. Schneider Electric's recently launched Galaxy VL three-phase uninterruptible power supply (UPS) is a green ecological product that can achieve 99% efficiency in intelligent bypass mode (E-transform-ECOnversion™). And the footprint of the product is very small, only 50% of the industry average. In addition, the Schneider Electric Galaxy VL features a groundbreaking Live Swap (in-line swap) feature that provides an anti-electric shock safety design for adding or replacing power modules during ups full operation, not only improving business continuity, but also reducing the risk of unplanned downtime.
Attract ESG investment
The fourth key driver that hosting providers should put sustainability first is attracting ESG investment.
Today, investment funds are tilting toward companies that are committed to mitigating their environmental impact and clarifying their ESG commitments. Most public companies have now published sustainability reports and implemented their commitments in their management systems. Bonds are another important form of financing, with some government agencies providing financing for projects that reduce their carbon footprint or improve energy efficiency in the form of loans, subsidies, etc.
Sustainability is a business imperative today
Sustainability is about more than just savings or doing good. It is critical to addressing the biggest challenge of this century : the climate crisis. For data center operators looking to stand out from the competition, this is the current business imperative. If you're interested in learning more about the top drivers of sustainability, visit Schneider Electric's official website and read the latest white paper, "Why Data Centers Must Focus on Environmental Sustainability: Four Key Drivers."