IT executives across the globe have a dilemma. Business leaders have made increasing productivity a priority and, for many companies, that means investing heavily in data and the AI tools needed to manage it.

Yet, at the same time, IT leaders are constantly being reminded by their executive colleagues that their companies have sustainability targets and that one of the biggest sources of carbon emissions is their data storage.

It is a global issue too. Google recently announced a 48 percent increase in emissions since 2019 and much of that energy consumption has been the result of the huge surge in AI use. Microsoft, which has positioned generative AI tools at the heart of its product offering, recently announced its CO2 emissions had risen nearly 30 percent since 2020 due to data center expansion.

It is not just the big tech companies either. As businesses become ever more reliant on data and AI, energy consumption will increase. Between 2022 and 2030, the demand for power will rise roughly 2.4 percent, Goldman Sachs Research estimates — and around 0.9 percent of that figure will be tied to data center usage.

Companies are increasingly coming under pressure from shareholders, unions and in some instances, their employees to adhere to sustainability standards.

They are responding by making positive changes such as shifting to renewable energy sources, monitoring, and in some instances replacing energy-hungry hardware and developing efficient data management practices. Meta, for example, has made efforts to address its energy footprint, claiming to have achieved 100 percent renewable energy in its data centers and offices by 2020. The company is also investing in new cooling technologies and AI systems that optimize energy use.

Why regulation could be a gamechanger

In some parts of the globe companies already do not have a choice when it comes to adhering to sustainability targets. Governments are beginning to force businesses to hit carbon emission reduction markers or face legal repercussions.

Next year, the Corporate Sustainability Reporting Directive (CSRD)  becomes operational in Europe, forcing 50,000 global companies to make their ESG data public. There are also the standards developed by the International Sustainability Standards Board (ISSB) under the International Financial Reporting Standards (IFRS) which will impact companies worldwide.

The headache for IT executives is that while they are often very aware of their company’s emissions, they do not always know how much carbon their partners are generating. This is going to become even more of an issue as one of the key components of CSRD is Scope 3 emissions which are indirect emissions of a company’s value chain. This includes emissions from a company’s entire tech stack including data storage.

Are companies ready to give a full picture of their emissions? It would appear not. A 2023 survey by KPMG uncovered that despite fast-approaching regulatory deadlines, a significant majority of companies (around 71 percent) are still not fully prepared for external ESG audits.

The impact of the environmental concern is already being felt by the data storage industry. In Wasabi’s 2024 Cloud Storage Index survey of IT decision-makers, sustainability was selected as a higher priority than price, scalability, and even performance.

So, when it comes to purchasing cloud storage in particular, sustainability has clearly gone from being a ‘nice to have’ to the top of the agenda.

How sustainable is cloud storage? 

As IT leaders know all too well any kind of data storage requires significant amounts of electricity. Yet cloud storage systems are more efficient and sustainable than onsite or hybrid models.

This is because cloud companies are proactive in ensuring that all the available capacity in their centers is utilized thereby minimizing wasted energy. The average hard drive uses around seven watts of power, regardless of whether the disk is full or empty, so high utilization is a major factor in improving energy efficiency.   

Economies of scale play a role here too. The bigger a data center becomes, the more energy-efficient it will be. By contributing to big data centers getting bigger, companies are bringing down the carbon footprint per terabyte.

Another key point for companies who are under pressure to reveal the exact amount of their greenhouse gas emissions to consider is how flexible their data storage providers are. Organizations should look for providers who are able to point to the specific location in the specific data center where information is being stored. This will then give them insight into exactly how much power is being consumed.

So, when it comes to choosing a cloud storage provider business leaders have much to think about, not least of which is sustainability. Renewable energy usage, carbon offsetting, and energy efficiency are all important parameters to consider. Given, however, the incoming regulatory changes transparency needs to be high on that list too.

Companies are continually striving to become more productive, and AI and tech tools can help them achieve their targets. Yet by making informed decisions about data storage, they can keep energy costs down and not achieve growth at the expense of the planet.