As a passionate outdoorsman and skier, I’ve seen firsthand how winters are shorter over the past 10-20 years and how the snowpack melts earlier each year on the ski slopes of North America. While there is certainly room for debate as to the cause, reducing emissions into the air we breathe while helping to slow global warming is something we can all hopefully support. I am excited to see an Accenture point of view on sustainable cloud and our intensive work on sustainability gain more visibility in today’s environment of massively accelerating data consumption and computing power.
Look to the cloud
Cloud is the foundation for digital transformation. In the past, companies spent millions on purchasing servers and negotiating real estate for data centers. Today, cloud is the most disruptive and value-creating technology of our time. Fortune recently quoted Julie Sweet, Accenture CEO, describing the move to the cloud as “the Henry Ford moment of the digital era.”
The business benefits of the cloud are clear and proven: Reduced costs, technically agile, and elastic to flex up or down in an ever-changing world. In our latest point of view, “The Green Behind the Cloud,” we also researched the environmental benefits of hosting computing services on the cloud.
Public Cloud vs. enterprise owned data centers
Many companies still opt to rent or build large-scale data centers, but data centers are energy intensive. When combined on a worldwide basis, they consume almost the same amount of electricity as the country of Spain. And the number of large-scale data centers continues to increase by 14% each year. However, by selecting a carbon-thoughtful public cloud provider and then maximizing the sustainability ambition of operating in the cloud, companies can significantly improve energy efficiency.
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Our Accenture analysis suggests migrations to the public cloud can reduce global carbon dioxide (CO2) emissions by 59 million tons per year – which is roughly the equivalent of taking 22 million cars off the road.
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The value of mitigating climate change
In January 2020, BlackRock (the world’s largest asset manager) made news when they announced pressure on companies to reduce emissions.
Fast forward to the age of COVID-19 and climate change remains top of mind even amid a pandemic. In September, the Business Roundtable released a perspective on a market-based emissions reduction policy, representing the thinking of Walmart, General Motors, and ConocoPhillips CEOs, to name a few. And Harvard Business Review recently featured a ten-page spotlight article on improving environmental, social, and governance (ESG) performance.
Our own research indicates that ESG performance matters. Between 2013-2019, high ESG performers enjoyed 4.7x higher operating margins than low ESG performers. High ESG performers generated higher annual total returns to shareholders, outperforming peers by 2.3x.
Smart and clean cloud migrations
In our experience supporting cloud migrations for hundreds of clients, we’ve seen how sustainable cloud helps companies deliver on financial targets. We’ve seen up to 30-40% savings on total cost of ownership.
To get the most from a cloud migration––both business and environmental value––we recommend three considerations for moving toward a “greener” cloud:
- Select a cloud provider with an energy-efficient mindset.
Many cloud providers have corporate sustainability commitments that affect how they plan, build, power, operate, and retire their data centers. These could include setting carbon-neutral targets, using a mix of renewable energy sources for electricity, as well as building energy-efficient infrastructures for cooling and water management.
- Build cloud computing with ambition.
When compared to conventional infrastructure, migrating to infrastructure as a service (IaaS) can reduce CO2 emissions by 84%. Reductions can be pushed even higher, up to 98%, by designing applications specifically for the cloud. Software development can deliver even more improvements. Accenture Labs’ research revealed that for certain types of programming techniques, the choice of coding language can impact energy consumption by as much as 50 times.
- Innovate further with circular operations.
Cloud providers have unique scale and financial incentives to adopt circular operations and sustainable products. They can design hardware for longevity, modularity, and circularity. This gives cloud consumers the ability to rigorously trace the value chains, both upstream and downstream, and recover value from unused materials and industrial waste streams.
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The green cloud future
Everyone agrees the climate is changing and actions must be taken. In its Global Risks Report, the World Economic Forum ranked “failure of climate change mitigation” as the number one risk by impact and the number two risk by likelihood.
As advanced technologies become the mainstream––e.g., artificial intelligence/machine learning (AI/ML), augmented reality, 5G––there will be an explosion of data hosted on the cloud, which means even more energy usage. For example, our research shows that while training a simple AI model for identifying flowers, increasing model accuracy from 96% to 98% resulted in a nearly 7x jump in energy consumption. The need to responsibly manage, process, and store petabytes of data will only become pressing as every business becomes a cloud-first business.
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