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Cloud Sustainability: Pathway to a Greener Future

Updated: Oct 22, 2023

Executive Summary

The migration to cloud computing over the past decade has been substantial and transformative. The worldwide end-user spending on public cloud services has experienced significant growth, reaching an estimated $411.4 billion in 2023, up from $304.9 billion in 2021. This growth has been driven by the scalability, flexibility, and cost-effectiveness offered by cloud services, particularly by hyperscalers -Amazon Web Services, Google Cloud, and Microsoft Azure- which have seen a combined annual growth rate of 25% over the past decade.


Gloabal Data Centre energy demand by DC type (cloud, on-premise)

However, this rapid expansion has also raised environmental concerns. The carbon footprint of the cloud computing industry is substantial, with some estimates suggesting that it is comparable to the aviation industry's carbon emissions. And the carbon emissions of cloud services are predicted to be very soon a Top3 criterion in cloud purchase decisions. This has led to increased pressure on cloud providers to have a transparent climate strategy and a clear roadmap for reducing their environmental impact.


As we delve into the intricacies of cloud computing and its environmental footprint, we aim to shed light on the pressing need for sustainable practices in this sector. This post will guide you through the environmental impact of cloud computing, the role of renewable energy, the importance of GreenOps, and the future of cloud sustainability. We encourage you to explore the sections that resonate with your interests and needs.


Understanding the Environmental Impact of Cloud Computing

Data Centres are power-hungry entities

Data Centers, which form the backbone of cloud services, are significant consumers of energy. This energy powers not just the servers, storage devices, and network equipment, but also the intricate cooling infrastructure designed to keep these systems operational. A single Data Centre can consume the electricity equivalent to 50,000 average US homes.


If the whole cloud were to shift to hyperscalers facilities, we might witness a drop in energy usage by as much as 25 per cent, thanks to the better efficiency and scalability of hyperscalers data centers. Nevertheless, the imminent threat of global temperatures projected to rise by 2.7◦C by the end of the century further underscores the urgency of addressing this issue.


Emissions Scopes

Understanding cloud computing's environmental impact requires familiarity with the concept of emission scopes. Emissions are typically categorized into three scopes:


Emissions scopes illustration

  • Scope 1 refers to direct emissions from owned or controlled sources.

  • Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company.

  • Scope 3 encompasses all other indirect emissions occurring in a company's value chain, often referred to as 'embedded emissions'.

For cloud computing, it's generally observed that Scopes 1 and 2 combined represent about 30% of a typical cloud usage carbon footprint, while Scope 3, or embedded emissions, account for the remaining 70%.


Water Consumption and Abiotic Resources Depletion

Alongside energy consumption and carbon emissions, another key environmental aspect related to Data Centres is water usage and the depletion of abiotic resources. Many Data Centres use large volumes of water for cooling purposes, contributing to the overuse of this precious resource. Additionally, the construction and operation of Data Centres involve substantial consumption of non-renewable materials, impacting the earth's finite resources.


Given the gravity of these challenges, there's a growing recognition of the need for cost-effective, efficient, and sustainable business strategies such as FinOps and GreenOps. These approaches help organizations manage and optimize their cloud expenditure and environmental impact, thereby leading us towards a more sustainable future in cloud computing.



Measuring the Environmental Impact of Cloud Computing

The Greenhouse Gas (GHG) Protocol

The Greenhouse Gas (GHG) Protocol, a widely used international standard for understanding, quantifying, and managing greenhouse gas emissions, plays a crucial role in measuring the environmental impact of cloud computing:

  • The GHG Protocol's Corporate Accounting and Reporting Standard defines methods for setting organizational boundaries and determining which entities and assets are included, such as subsidiaries, joint ventures, partnerships, facilities, and vehicles.

  • The GHG Protocol's Corporate Value Chain (Scope 3) Accounting and Reporting Standard is used for Scope 3 emissions, which includes the emissions of a company's utilization of cloud services. However, the category under which cloud emissions fall depends on the specific cloud use case.

The metrics

Several metrics are used to assess the environmental impact of cloud computing. These include:

  • Carbon emissions are measured in tonnes of carbon dioxide equivalent (tCO2e). This value represents different greenhouse gases and, their varying global warming potentials converted into equivalent tonnes of carbon dioxide.

  • Water consumed,

  • E-waste,

  • Land occupation,

  • ADP - Abiotic Resource Depletion Potential, refers to the removal of abiotic resources from the earth, or the depletion of non-living natural resources.

  • Energy consumption: the energy used by the machines running cloud services, including electricity for power and cooling, is part of a company's Scope 3 emissions. The company's share of these emissions depends on how much of the cloud services they use.

Renewable Energy and Cloud Sustainability

Cloud service providers have been making significant strides in incorporating renewable energy into their operations.

  • Amazon Web Services (AWS) has committed to achieving 100% renewable energy usage for its global infrastructure by 2025, as stated in their Sustainability Report.

  • Microsoft Azure has also pledged to shift to 100% supply of renewable energy by 2025, as outlined in their Sustainability page.

  • Google Cloud Platform (GCP) has achieved four consecutive years of 100% renewable energy and aims to run on carbon-free energy, 24/7, at all of their data centers by 2030, according to their Sustainability page

The real impact of renewable energy on your cloud sustainability

Renewable energy initiatives primarily impact Scope 1 and 2 emissions, which are direct emissions from owned or controlled sources and indirect emissions from the generation of purchased electricity, respectively. However, it's important to note that these scopes only account for about 30% of a typical cloud usage carbon footprint. The remaining 70% is attributed to Scope 3, or 'embedded emissions', which includes all other indirect emissions occurring in a company's value chain. Therefore, while transitioning to renewable energy is a positive step, it does not directly address the majority of the carbon footprint associated with cloud computing.


Consequently, the use of renewable energy should not be seen as a panacea for the environmental impact of cloud operations. It's crucial to understand that renewable energy is part of the solution, but it does not absolve cloud service providers and their customers from the responsibility of improving the overall sustainability of their operations. The goal should be to optimize cloud operations for environmental impact, in addition to cost and performance, which is the essence of GreenOps. Much like FinOps has become integral to cloud cost optimization, GreenOps is becoming an essential part of cloud sustainability.


Follow the Sun

The choice of cloud region can positively impact the carbon footprint of cloud workloads. By selecting a region with a low carbon intensity in the energy mix, users can reduce the environmental impact of their operations.

However, it's important to note that the carbon intensity of a region can vary throughout the day. Therefore, timing can also play a crucial role in optimizing the carbon footprint of cloud workloads.

Carbon intensity of the enegy mix
Variability of the carbon intensity of the energy mix, per region

An emerging best practice in this context is the 'follow the sun' model. This approach involves scheduling compute workloads and batches to run at times when the carbon intensity of the energy mix is lowest. This strategy not only optimizes energy consumption but also reduces the carbon footprint of cloud operations. According to a Lucidchart article, the 'follow the sun' model can also increase responsiveness and reduce delays.



Benchmarking the Hypescalers on their Carbon Calculators: AWS, Azure and GCP

As the demand for cloud services surges, so does the environmental impact. AWS, Azure, and Google Cloud Platform (GCP) have introduced carbon calculators to estimate the carbon footprint of their services. However, the methodologies and transparency levels vary significantly.


AWS

AWS's carbon calculator only includes Scope 1 and 2 emissions, omitting Scope 3. The exact activities considered within these scopes are not documented, and the allocation methodology remains undisclosed. This lack of transparency and maturity in AWS's calculator is disappointing, especially considering the company's size and influence.


Azure

In contrast, Azure's carbon calculator is comprehensive, covering Scope 1, 2, and 3 emissions. The methodology is well-documented, and the data is updated regularly. Azure's approach is commendable, as it provides a more accurate estimation of the environmental impact. However, the allocation methodology, based on billing units, may not accurately reflect the physical effects.


GCP

GCP's carbon calculator is also transparent, considering Scope 1, 2, and 3 emissions. It follows a bottom-up approach, allocating emissions based on the percentage of CPU time used by each service. However, some elements, such as end-of-life equipment emissions, are not included. The data is updated monthly for Scope 3 and hourly for Scope 2, providing a more granular view.


The sector lacks standardization, leading to a plurality of approaches. Open Source tools like Boavizta.org cloud-scanner and Cloud Carbon Footprint offer transparent, granular, and standardized alternatives but are limited by the architectural data provided by the CSPs.


Beyond greenhouse gas emissions, other impacts such as water usage, land occupation, and waste issues are gaining public attention. A multi-criteria approach is essential to understand the full environmental impact of digital services and avoid pollution transfers. As CSP carbon calculators are a step in the right direction, their usefulness hinges on their integration into IT strategies.


How to report the emissions linked to your cloud infrastructure emissions

Understanding and reporting cloud emissions can be a complex task, particularly as they fall within Scope 3 emissions for cloud users. This is due to the fact that a cloud provider forms part of your company's supply chain, which is encompassed within Scope 3. However, Scope 3 itself is divided into 15 categories, and the correct reporting category for your cloud emissions can vary depending on your specific use case. Here's a breakdown of some potential scenarios:


Purchased Goods and Services (Category 1)

When your company procures a software service, such as an online customer management tool, the emissions associated with the creation, delivery, and operation of this software on the cloud provider's infrastructure are part of the vendor's Scope 3 emissions. These emissions form part of your supply chain emissions and include the energy used to develop the software and manufacture the hardware that runs it.


Upstream Leased Assets (Category 8)

If your company has dedicated machines or equipment within a cloud provider's facility, such as an Amazon EC2 Dedicated instance, the emissions from these machines, including the energy used for their operation and maintenance, are part of your company's Scope 3 emissions. This is particularly relevant when a company has significant control over the machines they use on the cloud.


Use of Sold Products and Services (Category 11)

If your company uses cloud services, like online storage or computing, provided by a company like Amazon Web Services, Microsoft Azure, or Google Cloud in its internal operations, the energy used by the machines running these services, including electricity for power and cooling, is part of your company's Scope 3 emissions. Your company's share of these emissions depends on the extent of the cloud services they use.


Downstream Leased Assets (Category 13)

If your company offers online services, like a web application or SaaS, to customers using machines it rents from a cloud provider, your company controls the machines, including managing how the services are set up and maintained. The emissions from the machines, including the energy used for operation and cooling, are part of your company's Scope 3 emissions.


The challenge then becomes: how can a company obtain data granular enough to distinguish between these use cases and report accurately in line with CSRD and the EU reporting standards for Scope 3 emissions? This is a question that many companies are currently grappling with.


The Future of Cloud Sustainability:

Emerging trends and technologies are set to impact cloud sustainability significantly, such as:

  • Edge computing, for instance, promises to reduce Data Center load by processing data closer to the source, thereby reducing energy consumption and carbon emissions.

  • Carbon capture and storage technologies are also being explored to mitigate the environmental impact of Data Centers.

  • Innovations in renewable energy are making it more feasible for Data Centers to run on clean energy, reducing their carbon footprint.

The rise of GreenOps

Environmentally conscious operations and practices in cloud computing are another promising trend. GreenOps is to cloud carbon footprint what FinOps is to cloud costs, an integral part of cloud optimization. It aims to optimize cloud operations not just for cost and performance, but also for environmental impact. This approach involves monitoring and managing energy consumption, carbon emissions, and other environmental metrics in cloud operations, thereby providing a holistic view of the cloud's environmental footprint alongside its financial implications.


Closing Remarks

As we navigate the complexities of cloud sustainability, it's clear that the path to a greener future lies in our collective efforts. The onus is on us to prioritize sustainable practices in our cloud operations and to support providers who are committed to reducing their environmental impact. It's time to take action and initiate a cloud optimization and green operations initiative within our organizations.

Green ideas bulblight

If you're unsure where to start or need expert advice, don't hesitate to reach out to OptimNow. Our team of experts is well-versed in cloud sustainability and can guide you on your journey towards a greener future. Remember, every step towards sustainability counts, and your action today can make a significant difference tomorrow.






Sources

2. Google Cloud Platform's Carbon Calculator https://cloud.google.com/carbon-footprint/docs/methodology

4. Boavizta's Cloud-Scanner https://boavizta.com/

5. Cloud Carbon Footprint https://www.cloudcarbonfootprint.org/

6. ADEME's RCP Datacenter and Cloud https://www.ademe.fr/

7. SDIA's work on Data Center Environmental Data https://www.sdia.eu/

9. Canalys: Worldwide Cloud Market Q4 2022 - Provides data on the global cloud market in Q4 2022.

10. Nature: Hiding Greenhouse Gas Emissions in the Cloud - Discusses the environmental impact of cloud computing and the hidden greenhouse gas emissions.

11. Gartner: Hyperscalers' Carbon Emissions Will Drive Cloud Purchase Decisions by 2025 - Predicts the influence of carbon emissions on cloud purchase decisions by 2025.





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