Reframing sustainability to climb past the green plateau
Executive Summary
Organisational approaches to sustainability have matured considerably - but are we hitting a green plateau?
We have made vast strides in how we see and measure sustainability.
Today there is a better understanding of the necessity of measuring scope 1, 2 and 3 emissions. There are more working groups, green startups and educational initiatives than ever, and many organisations are being open and transparent about their work, helping the rest of us learn best practice.
But despite this, our latest research shows a slowdown in the pace of change. Although a commendable number of organisations (36%) are measuring their scope 1, 2 and 3 emissions, only an additional 2% will do so in the next five years. Furthermore, membership of net zero initiatives and sustainability industry groups is anticipated to stay broadly the same, showing a plateauing of effort in the fight against the climate crisis.
A key part of this is the biggest perceived barrier to change: cost. 45% of organisations see cost as the largest barrier to being a more sustainable business, but this is to some extent a fallacy.
Sustainability can also be frugality. Recycling can be purchase avoidance and sustainability can drive tangible, measurable improvements across many parts of businesses.
This report details these issues and more, looking at how organisations are approaching and measuring sustainability today, what their barriers are and what this means for their targets.
Sustainability is a desperately urgent concern, but we also need to view it in a pragmatic way that sits harmoniously with commercial concerns if we are to drive initiatives through the business. Sustainability can be a cost-saver, not just a cost-centre. It can drive significant improvements across organisations in a very pragmatic way.
And let’s be clear: if we’re to get past ‘the green plateau’, then we need to reframe how we see sustainability. It’s not just a nice to have – it’s about making sure that we can answer the business needs of today without compromising the world of tomorrow.
This report documents the views of IT decision makers across the country, helping us to understand the challenges that they’re facing and the opportunities they see. It’s our hope that this will help to lay the groundwork for businesses to learn valuable lessons, and help the technology industry to supercharge its sustainability strategy and overcome the perceived barriers.
A Critical Point for Sustainability
We are at a critical inflection point in our sustainability journey. For the first time, across an entire year, global warming exceeded 1.5° with floods, droughts and heatwaves experienced across the world.
We worked with an external market research agency, Censuswide, to understand the views of technology decision-makers on the topic of sustainability. Censuswide carried out a study of 500 IT decision makers in the UK, in organisations of between 201 and 700 employees.
Their understanding seems to mirror today’s concerns. Less than a third of decision-makers in the UK (28%) believe that we have a bright, clean future ahead of us, with a quarter admitting that we’re at a critical stage for sustainability, particularly in the technology industry. In a rather more sobering statistic, one in six already believe that we’re looking at disaster.
Over the next few pages, we’ll look at why this might be. How are organisations approaching sustainability, and measuring their efforts? What’s standing in their way? And what should they be doing to redouble their efforts to be more sustainable businesses?
What is the role of the technology industry in sustainability?
The technology industry is often seen as a double-edged sword when it comes to sustainability. It’s estimated that the digital world contributes 4% of the world’s greenhouse gas emissions, and within this, cloud computing specifically contributes 15%.
Some sub-industries within technology are more power-intensive than others. For example, according to the White House, the total power usage for the cryptocurrency economy is around 180 billion kW hours per year, which is more than the electricity used by all of Australia in the same time period. According to some sources, an AI-search enquiry consumes fifteen times more power than a regular search query.
On the other hand, technology has an enormous part to play in fighting carbon emissions:
• Engineering simulation technology has been crucial in supporting the development of direct carbon capture methods from organisations like Swiss innovator Climeworks.
• The development of electric vehicles allows us to dramatically reduce carbon emissions.
• Smart metres and energy efficient infrastructure is helping us to measure and reduce our power consumption.
• Better, more efficient solar panels, as well as other renewable energy sources are allowing us to power infrastructure without releasing harmful gases into the atmosphere.
• At a basic level, using digital screens rather than printing hard copy is intrinsically greener.
The good news is that the majority of technology firms are doing something to help sustainability efforts today. The most common answer to the question was recycling: 44% of organisations recycle where possible, and 40% aim to conserve power with smart lighting schemes or by switching to more efficient and renewable power sources.
Just over a quarter of respondents said that sustainability was a strategy that permeated all company operations, affecting every decision made by the senior team. In fact, only 3.5% of the study admitted that they didn’t currently have a sustainability strategy in place.
Behavioural change was also mentioned by a large number of survey respondents: Over a third (36%) were educating staff to improve their impact on the world, and 31% said that they were looking at reducing travel or using technologies to monitor and optimise fuel and energy consumption.
What about tomorrow?
At first, looking at organisational sustainability priorities for the next five years looks positive. Companies are considering a range of initiatives, but as we’ll see, there’s a dangerous inertia creeping into the market.
Over the next five years, 38% of organisations will choose suppliers because of their sustainability credentials. 36% will offset carbon emissions.
However, 44% of our panel said that their priorities for the next five years include recycling, 40% will optimise power usage, and 34% will educate staff.
If these statistics look familiar, it’s because they’re almost identical to what firms are doing today.
This industry challenge is particularly apparent when we look at one of the most important parts of an organisational journey to net zero: measurement.
But first we have to take a look at the core pillars to net zero.
The Journey to Net Zero
Urgent as the climate crisis is, it’s unrealistic to expect companies to change overnight. Large organisations have established ways of working, established supply chains and cultures. Although there are a number of champions, for others, changing course is rather like – in the words of the late Douglas Adams – watching oil tankers doing three-point turns.
The journey to net zero, that is to say, reducing carbon emissions to nothing, consists of three main stages. Firstly, organisations must understand what their emissions are today. If you can’t effectively baseline where you are, then it’s almost impossible to make a meaningful difference.
Within this measurement, there’s another commonly used term: scopes. Scopes define where the greenhouse gas emission comes from: scope one emissions are those from equipment directly owned by you – for example, on-site generators. Scope two emissions are from bought energy, from power firms, for example. Scope three emissions are ‘downstream’ emissions – for example, from the firms that manufacture the components you use to create a product.
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These scopes aren’t always equal. Scope three emissions are usually the lion’s share of a company’s emissions, but also the hardest to measure. For example, Apple’s scope three emissions represent approximately 80% of its total emissions globally*.
With that in mind, once a company has measured where it is, then it can work out where to cut down on emissions, reducing and optimising your current carbon footprint - sometimes measured as ‘Scope 4’ or ‘avoided’ emissions.
Thirdly, there’s an understanding that all organisations will have some kind of carbon footprint, so the next step is compensating by carbon capture or offsetting, so that the organisational impact is effectively zero.
Where are organisations today?
So what does this mean?
According to the study, almost half of technology organisations today (46%) have now joined a net zero initiative or are part of an industry group working towards sustainability. Over a third (36%) are measuring their scope 1, 2 and 3 emissions, and 29% are measuring scope 1 and 2.
The challenge for the environment is that in five years’ time, only an additional 2% of organisations expect to be measuring all three scopes (38%). This is a concerning statistic, but there are reasons why organisations are finding it difficult to drive sustainability initiatives forwards and get past the ‘green plateau’.
The Cost Conundrum
The biggest concern for organisations in the UK is cost. Just under half (45%) listed it as their largest challenge, well ahead of the next challenge (factors outside of organisational control) by just over 15%.
This is understandable, but as we’ll see, also a misconception.
The survey respondents also cited factors outside of their immediate control as concerns – for example, a lack of green energy facilities, or the inability to harness adequate solar power. Simple practicalities also got in the way for 28% of respondents – for example, changing energy suppliers.
Just under a quarter (24%) mentioned that people, process and cultural considerations got in their way, which reinforces the importance of educational initiatives in the workplace.
Almost one in five (19%) decision-makers admitted that a lack of dedicated environmental teams that could support initiatives also hampered their progress. It’s likely that this is something we will see change in the coming years: sustainability cuts across almost all parts of the business, making it vital to have cross-functional teams that can help to build a business case for sustainability.
At a broader level, 23% of respondents said that lack of government support was a barrier to achieving their sustainability targets, with 16% saying that supplier issues – such as a lack of green datacentres – was a challenge.
The big picture is not entirely bleak, however. More than two thirds of organisations (69%) anticipate meeting their sustainability goals in the next two years, with only one in six (16%) certain that they’ll miss them. 15% hover on the fence, unsure of whether they’ll reach them or be on track within twenty-four months.
Is the ‘green plateau’ insurmountable?
Where does this leave us? Is the plateau an insurmountable barrier to driving sustainability forwards in the UK? Will we see little change in the next five years, only for companies to miss their 2030 targets?
No, but it does need a psychological shift and to reframe how we look at sustainability.
Many organisations realised some time ago that a sustainable and efficient energy strategy wasn’t just a nice-to-have during the energy price fluctuations. Hitachi has had sustainability at its core since its inception over a hundred years ago. At OVHcloud, we’ve been using water-cooling in our servers rather than air-cooling for over twenty years, and it’s not just helping to save the environment – it’s also keeping our power bills down. In fact, despite 13% growth in the last financial year, we’ve decreased our carbon footprint by almost 15%.
Recycling and reusing materials is also not simply about sustainability, it’s about purchase avoidance. In 2023, we re-used 36% of our server components, giving them a new lease of life, as well as offering more budget server lines with older, lower-performance parts.
A holistic sustainability strategy is about thinking through every link in the supply chain and your corporate process, examining materials, people, process and everything in between to see where you could potentially make improvements.
There’ll always be places where you can’t cost-effectively make sustainability work, and that’s when the ecosystem comes into play. There are smart startups out there moving sustainability forwards in ways that larger organisations often can’t deliver – but it’s crucial to know what’s out there if you’re to benefit from their cutting-edge abilities.
Finally, where possible, create cross-functional teams or roles. Sustainability cuts across many practices, from manufacturing to HR, from operations to senior strategy, but working in silos can not only miss opportunities to improve the impact of the project, but also miss opportunities to see them as a cost-saver, rather than a cost-centre.
Ultimately, driving sustainability does require hard work, perseverance and energy, but the technology industry is in a unique place to drive change. A good sustainability strategy preserves the business of today without compromising the world of tomorrow. If we can reframe sustainability as having a positive impact on the bottom line, removing and stabilising business costs, without even considering the impact on shareholder confidence and ESG ratings, this can greatly help to change the business perception of the issue and drive change.
This change, this drive, this energy, is vitally important for getting over the ‘green plateau’ and making sure that we help our industries to be better, greener and leaner – all at once.
OVHcloud: A sustainable cloud provider
There’s only one way to solve the climate crisis: together, but nonetheless, we’re proud to do our part.
OVHcloud was founded in 1999 as a different kind of cloud provider:
• We’re vertically integrated: we assemble and disassemble all of our servers in two facilities around the world. Last year, we re-used 36% of our components and recycled the rest when they reached end-of-life.
• We invented our own form of watercooling in 2003, used in every datacentre we own, helping us achieve a PuE of 1.29, and a WuE of 0.26 L/kWh, significantly ahead of the competition. An average datacentre consumes 390,000 gallons of water per day, but with our closed loop system, we’ve got this down to 55,000.
• Because of our water-cooled systems, we can re-use old buildings for our datacentres: 24 of our 33 facilities are renovated from older buildings. Where we can’t innovate on our own, we partner. We’re working with TerraNova to help recycle motherboards more easily, and Umains to recycle the packing foam that components arrive in.
• We’re continuously looking at ways to improve, because they aren’t just a ‘nice to have’ – they’re essential. Our efficiency helps to lower power bills and avoid unnecessary purchases. In 2022, we invented a new form of immersion cooling, which further improves efficiency and completely removes dust from the equation, significantly improving component lifespan.
• We’re open and transparent about our emissions across all three scopes, and also make this information available to our bare metal and hosted private cloud customers as a carbon calculator on a monthly or yearly basis, including information about the clean energy mix.
• We’re independently assessed by organisations like S&P Global Ratings, and last year were rated 71/100 and recognised as ‘strong’ in particular for our GHG emissions and water use. We’re also part of industry groups like the Climate Neutral Datacentre Pact and the VMware Zero Carbon Committed Initiative.
You might already know us for our award-winning IaaS and PaaS portfolio. We’d love to talk to you about it, but when it comes to sustainability, we’re also a bit different.
Because the world needs different.
Thank you for reading.