As hyperscalers and cloud data centers grapple with the dual challenges of reducing Scope 3 emissions and managing escalating power consumption, the technology sector finds itself at a critical juncture.
With global greenhouse gas (GHG) emissions on the rise, these entities face mounting pressure to adopt sustainable practices while meeting ever-growing demand for digital services, says GlobalData.
With the tech sector accounting for 2-4% of global GHG emissions and 7% of worldwide power consumption, hyperscalers and managed cloud service providers are responsible for a considerable proportion of the total.
Rising energy costs and demand have become an increasingly important strategic and political issue.
Robert Pritchard, Principal Analyst, Enterprise Technology and Services at GlobalData, comments: “Cloud services play a role in everyone’s life in the 21st century – and especially amongst businesses and government bodies. A very significant part of providing these services is energy – and the acceleration of adoption of artificial intelligence is only going to drive further rapid growth in demand.”
GlobalData analysis reveals that Scope 3 emissions, stemming from indirect sources, constitute a substantial 70-90% of greenhouse gas emissions.
In response, hyperscalers and managed cloud providers are endeavoring to mitigate their consumption. Notably, they have achieved considerable success in managing Scopes 1 and 2, where they exert more direct control.
Pritchard adds: “Most large tech companies are aiming to be carbon net zero by 2030 or 2040, and progress has been made by using more efficient equipment and by moving to renewable energy sources. Achieving Scope 3 will see tech companies demand similar efforts from their supply chain to meet their targets, which is a very tall order.”
Pritchard continues: “Many tech companies are looking to differentiate on their ‘green’ credentials and sustainability is a strategic issue. Validation is key, as are targets. A growing number of customers, partners, and governments require specific achievements as stakeholder entry stakes.”
Pritchard concludes: “However, a significant obstacle is emerging. The buying scale and huge consumption of energy by data centers means that both renewable and traditional energy supply is becoming challenged at a local level – and the authorities have noticed. Future planning for data center roll-out may be constrained by these concerns. Already seen as great innovators, the data center world is going to have to come up with some new answers.”
