The International Energy Agency (IEA) projects that by 2026, data centers will consume more than double their energy consumption in 2022. This usage is attributed to the world’s reliance on the internet, the shift to cloud computing, and the emergence of AI. All three factors are fueling the demand for more and more data centers. According to the research firm SemiAnalysis, AI data centers will use 4.5% of the world’s energy by 2030. While energy consumption is increasing significantly, climate change is driving companies across all sectors to reduce their environmental impact. This includes hyperscalers—firms that run large-scale data centers with significant computing and storage capabilities. Hyperscalers are facing significant challenges with the rapid growth and demand for AI. This results in major increases in energy consumption making it difficult to reduce carbon emissions. Not addressing the environmental impact can lead to reputational damage, increased regulatory scrutiny, and potential disruptions in supply chains due to resource shortages.
Amazon Web Services (AWS), Digital Realty, Google, Meta, Microsoft, and Schneider Electric, members of the iMasons Climate Accord’s Governing Body, released an open letter urging data center suppliers to adopt Environmental Product Declarations (EPDs). EPDs offer transparency that is crucial for accurately calculating Scope 3 emissions, which make up a significant amount of a data center’s total carbon footprint. Strategies to achieve net zero greenhouse gas (GHG) emissions include:
Carbon Emissions Sources
Hyperscalers generate carbon emissions from various sources: electricity consumption for powering data centers, cooling systems, server manufacturing and disposal, transportation and logistics, operational energy use, and indirect emissions related to the supply chain. Given the high energy and resource demands of their operations, hyperscalers are crucial in global efforts to combat climate change.
It is important to note that for major hyperscalers, the carbon footprint is predominantly composed of Scope 3 emissions, which are generated by their supply chains. This large proportion results from their complex supply networks, energy-intensive production, and upkeep of data center equipment. By comparison, Scope 1 emissions are relatively insignificant, making up only 0.2-0.5% of the overall carbon impact. Scope 2 emissions make up the remaining carbon content of the electricity used.
Carbon Emissions Challenges
To effectively manage their carbon footprints, hyperscalers need precise measurements and reports of their carbon emissions. However, quantifying these emissions can be challenging due to any number of reasons. Hyperscalers have complex, multi-tiered supply chains, making it difficult to identify and quantify emissions across these layers. Since emissions reporting standards are continuously evolving, it creates complexity in the reporting process.
In addition, the lack of universally accepted methodologies leads to inconsistencies. This makes it difficult for stakeholders to calculate and report on emissions. Stakeholders and suppliers may also be reluctant to share data due to confidentiality and reputational concerns. It is important to note that significant time, effort, and technical expertise are required for comprehensive emissions reporting. Smaller hyperscalers may struggle with the financial and technical investment needed for robust reporting systems.
Carbon Reduction Strategies
Despite these challenges, hyperscalers are implementing various strategies to reduce their emissions and enhance sustainability. They are actively working to reduce their carbon footprint by investing in renewable energy, improving energy efficiency, and implementing carbon offset programs. Their strategies may include:
- Renewable energy adoption: Committing to sourcing 100% of their energy from renewable sources. This helps to significantly reduce Scope 2 emissions, and influence suppliers to adopt greener practices. In 2023, all of the electricity consumed by Amazon’s operations, including its data centers, was matched with 100% renewable energy. Amazon reached its renewable energy goal 7 years earlier than the projected 2030 target date. According to Bloomberg NEF, Amazon has been the largest corporate purchaser of renewable energy in the world for 4 years in a row.
- Energy efficiency improvements: Investing in state-of-the-art technologies to improve the energy efficiency of their data centers. This strategy may involve using more efficient cooling systems, optimizing server utilization, and adopting advanced power management techniques.
- AI integration: Leveraging AI-powered analytics and control systems to monitor and adjust energy usage in real time, predict cooling demands, and manage workloads more efficiently. Predictive maintenance models powered by AI can also anticipate equipment failures, optimize maintenance schedules and help improve the lifespan and efficiency of data center infrastructure.
- Supply chain collaboration: Companies can work closely with suppliers to improve emissions reporting and reduce Scope 3 emissions. This approach includes incentivizing suppliers to disclose emissions data, integrating emissions reduction targets into procurement policies, and fostering collaborative platforms for data sharing. Google recently announced its Renewable Energy Addendum program. This program is one of Google’s initiatives to address its carbon footprint, and under this initiative Google asks its largest hardware manufacturing suppliers to commit to achieving a 100% renewable energy match by 2029.
Conclusion and Recommendations
As hyperscalers continue to grow and expand their operations, their role in global sustainability efforts will become increasingly critical. They will need enhanced reporting and transparency, greater supplier engagement, innovation in data center design, policy and regulatory compliance, and drive sustainability efforts across industries and communities, promoting sustainable practices and policies.
Canopy Edge was formed with one goal in mind – to bring the best corporate sustainability expertise to businesses that launch their sustainability initiatives for the first time. To find out more about getting started on your sustainability initiatives, contact Canopy Edge for an assessment of how we can quickly launch a highly effective and efficient program to make meaningful emissions reduction progress within your business.
