As businesses grapple with challenges around managing multiple cloud-based data workloads and the subsequent costs of increased cloud capacity, they could perhaps be forgiven for taking their eye off the ESG ball.

It can, after all, be an emotive subject in some quarters but it really shouldn’t be. The E bit in ESG in particular has been the most prominent component for organizations looking to reduce energy consumption and therefore costs. As we continue to navigate an unpredictable energy market and rising inflation, ESG becomes an even more powerful measure of an organization’s resilience and ability to adapt.

Part of the problem organizations are now facing in managing energy consumption is AI-driven automation. This is something Gartner warned about back in January, in its 10 Strategic Predictions for 2023. By 2025, it says, “AI will consume more energy than the human workforce, significantly offsetting carbon-zero gains.” It’s a worrying prediction because it is essentially saying that we are not moving quickly enough as an industry to address energy consumption; and, surely, that has to change.

There is certainly growing pressure from governments, investors, and customers. Come 2024, companies in Europe and US-based companies with European links will have to report their carbon emissions within the ‘three scopes’, which are essentially the ‘direct,’ ‘indirect,' and ‘all’ carbon emissions. NetZero pledges and an organization’s ability to demonstrate actual carbon reduction (as opposed to offsetting) are linked to brand reputation, something that investors increasingly consider.

For organizations to understand how to grow effectively, so that margin is not hindered by the additional costs of that growth, measuring, and managing energy consumption makes a lot of sense, especially in the data center. As we all know now, data centers can be hungry beasts when it comes to energy, so knowing consumption and being able to plan ahead is prudent. In fact, every organization should be implementing an ESG strategy from the top down, from the board and C-Suite, while the main sponsor of that strategy should be CIOs and CFOs, as they are, after all, already paying the electricity bills.

Embracing digital sobriety

Compliance, of course, is also a key driver for implementing an ESG strategy. But, surely, any business can see the benefit of reducing costly waste and optimizing IT performance to ensure profitable growth?

The more conversations that are had about this subject, the more that can be learned. As Deloitte recently showed in its report on ESG governance, board-level recognition of ESG is on the rise but concludes that “companies may need to adapt quickly to advance their climate data measurement and reporting and to drive decision-making regarding the allocation of resources.”

The point here is that all organizations need to keep evolving, to keep learning, and should not assume everything is covered because there is an ESG policy in place. As we look at NetZero targets and progress to date, it is clear that more needs to be done. This is where something like digital sobriety comes in.

The term ‘digital sobriety’ is commonly used in France. It refers to the abstinence from, or a more responsible consumption of digital products. This, of course, reduces energy consumption and associated emissions but it needs managing. Fundamentally, businesses need to address how they are using the resources they need for growth, identify waste, and act accordingly.

Now, we have the opportunity to show how technology, such as more energy-efficient infrastructure and operations in data centers, can actually help accelerate organizations towards sustainability targets. Having a cloud-based data center, for example, not only has efficiency and financial benefits but can link to sustainability benefits through reduced energy consumption.

Combining a digital sobriety strategy with one that identifies opportunities in hardware infrastructure to reduce emissions can reduce pressure on data centers. At the same time, it can also reduce costs, deliver more efficient data management services, and help improve customer engagement. In addition, there have been plenty of reports claiming improved employee attraction and retention, as a result of an organization’s ESG strategy and during a period of pressure on skills, which can only be a good thing.

To be fair, the data center industry as a whole has embraced sustainability, investing in measures to reduce energy consumption and therefore emissions but there is always room for improvement. This is a fast-moving space and for any organization to accelerate cost reductions and carbon impacts, there is a need to constantly assess and reassess infrastructure and strategies. 

For organizations, targeting legacy systems and processes has to be a priority. While hyperconverged, cloud-based infrastructures can immediately reduce impacts through reduced energy consumption, ESG has to be a companywide strategy, from the top down. It has to be all-encompassing because really, at its heart, ESG is the future of any business.