Revealing the Hidden Carbon Footprint of the Cloud

Cloud-enabled digital workplace solutions are permanently altering the way we live and work and even allow us to collaborate in new ways. Yet there can be a cost associated with these technologies that is not immediately visible to most consumers: the carbon footprint of the cloud.

Cloud options can be more efficient and affordable than on-premises data centers, and they support our increasingly digital ways of working. The experience of using these tools—like email, file hosting, websites, and workplace messaging apps—can be so seamless that the associated energy usage is effectively invisible to people during their daily work.

Without visibility, it’s difficult for businesses to address the rate of cloud consumption. Still, they are responsible for their carbon footprint in the cloud—and for the sustainability of their cloud architecture.

How can emissions-aware cloud consumption benefit businesses?

The percentage of corporate data stored in the cloud is rising rapidly, reaching 60% in 2022. As a result, the global carbon footprint of data centers is growing.

Meanwhile, businesses are facing rising pressures to reduce their greenhouse gas (GHG) emissions, and regulatory scrutiny is quickly increasing. For example, in 2019, the UK signed into law a commitment to bring all greenhouse gas emissions to net zero by 2050 and by September 2022, over 90% of GDP was covered by some form of net zero target. These ambitious net-zero targets leave many companies asking how they can make a meaningful impact.

Efficient architecture in the cloud can help reduce carbon emissions, and also cut costs by optimising workloads and storage needs. Making these changes now can help companies be ready for a more emissions-conscious future as GHG regulations may lead to rising demand and higher prices for carbon removals and offsets.

And as customers, investors, and regulators turn up the pressure for businesses to become more sustainable, it’s more important than ever to demonstrate the impact of environmental efforts. When businesses can quantify the reduction in their emissions—and show that they’re not just offsetting them—net-zero goals become a reality. Measuring these efforts shows that businesses are not only decarbonising as much as possible and using offsetting as a last resort, but it also helps avoid the risk of "greenwashing", where unsubstantiated claims lead to monetary fines, reputational damage, and limited social license to operate.

Three actions you can take for collective impact

While employees may not think about the emissions associated with cloud services, the energy consumption and emissions generated through their use of email, cloud storage, and collaboration technologies still contribute to their company’s scope 3 emissions.

At scale, small changes add up to make a big difference. This is why it’s important for organisational leadership to raise awareness among employees, helping them understand specific actions they can take to only use what they need and to work and collaborate more efficiently.

1. Data retention: Simply saving a document in the cloud comes with an emissions cost regardless of energy source e.g., embodied emissions of storage hardware. And with documents that auto-save multiple versions, the data storage associated with a project can be greater than employees realize.

What you can do: Determine what your organisation needs to save in the shared cloud environment, then look for ways to store less of the data that you don’t need.

2. Document sharing: It takes more carbon to attach a document to an email than it does to share a link to a cloud-hosted file. By changing practices around saving and sharing files, employees can have a collective impact on the company’s carbon footprint.

What you can do: Reduce emissions by sharing links to cloud-hosted files instead of attaching them to emails.

3. Hybrid work and commuting: When determining whether an employee should go to the office or work from home, calculating the emissions related to the commute isn’t enough. In terms of energy usage, office buildings can achieve an economy of scale that home workspaces may not. Some businesses also use virtual reality (VR) and augmented reality (AR) to enhance virtual working environments but considering the amount of energy these technologies consume is important.

What you can do: When making the decision on whether an employee should fly to an event, the energy associated with travel against the energy needed for remote working alternatives should be considered. While recognising that many other factors will be considered and that the work from home versus office sustainability calculation is far from a simple one.

A clearer view of cloud consumption

Empowering employees to take steps to reduce their carbon footprints is just one-way organisations can improve their sustainability stance. Rather than maintaining energy-hungry, on-premises data centers, cloud service providers (CSPs) can achieve economies of scale which help reduce an organisations equivalent on-premises data centers energy consumption and associated emissions through greater efficiencies.

Many CSPs are investing in more efficient hardware, software, and processes to reduce their—and, in turn, their customers’ – carbon footprints. In addition, the three largest hyperscalers—AWS, Google Cloud Platform (GCP), and Microsoft Azure – heavily invest in renewable energy and have set ambitious carbon reduction targets.

All three major hyperscalers offer tools that help their customers track cloud consumption and associated carbon emissions, providing capabilities that can facilitate reporting to regulators and other stakeholders.

• Amazon Web Services (AWS): The Carbon Footprint Tool allows Amazon Web Services customers to measure, track, report, and forecast their cloud-associated emissions.
• Google Cloud Platform (GCP): Carbon Sense Suite comprises three tools designed to support Google cloud customers in their sustainability efforts. The Carbon Footprint dashboard gives admins the ability to view emissions by product, month, region, and more. The Region Picker tool helps customers choose data centers by balancing carbon emissions of the available facilities against price and latency metrics. And the Active Assist tool suggests carbon-reducing configurations.
  
• Microsoft Azure: With the Emissions Impact Dashboards for Azure and Microsoft 365, cloud customers can get an estimate of emissions avoided by migrating productivity workloads to the cloud. Cloud customers incorporating Microsoft 365, gain transparency into data center emissions associated with usage of Microsoft 365 services, including storing files in SharePoint, conducting online meetings with Teams, and sending emails through Exchange Online. In addition, the Microsoft Sustainability Manager provides wider ESG reporting capabilities.
  

Making a difference

In terms of climate impact, the less energy you use, the better. While some CSPs are often powered by renewable energy, cloud may still have associated emissions depending on the energy source mix and availability of renewable energy. Increased reliance on cloud technologies is driving up energy consumption, organisations should strive to optimise and find efficiencies to reduce overall consumption and conserve as much energy as possible when consuming cloud (regardless of energy source) as significant electrification is needed across our economy and society. Small changes in how businesses use the cloud can have a massive collective impact.

To do this, individuals and organisations need better visibility of their consumption so they can understand how much they are using. As carbon footprint tools and dashboards become more available and comprehensive, they will empower leaders to measure, substantiate, and report on their carbon emissions more accurately. And they can encourage employees to work more efficiently with the digital workplace technologies that are shaping the future of work.

To learn more about sustainable cloud, and how Deloitte can support you with your net zero journey, get in touch today.