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Digital ESG: Managing your organization’s digital carbon footprint

Nov 29, 2022

Every email, every video call, every document saved to the company servers — it all has an environmental impact. According to the Shift Project, our digital activities generate nearly 4% of global greenhouse gas emissions. And the problem is growing rapidly, with global digital energy consumption increasing by about 9% annually.

That’s why digital carbon footprints have been described as the next frontier in the fight against climate change. Digital technology — if left unchecked — is on track to become a leader in global carbon emissions.

The European Union is already eyeing data centers as a likely target for regulation. So, it wouldn’t be surprising to see digital reporting mandates flow down into emerging environmental, social and governance (ESG) requirements.

A 3-step approach to digital ESG

Our businesses generate vast amounts of data. It takes energy to process, transmit and store all of this information. That’s why business leaders committed to improving their carbon footprint should include IT in their ESG efforts.

Sometimes called “digital sobriety,” this approach doesn’t mean you need to turn your systems off, and it doesn’t mean sacrificing the user experience either. It means increasing efficiency and performance and maintaining your entire IT system in an ecofriendly format.

When you’re ready to reduce your company’s digital pollution, start your focus in these three areas: infrastructure, data and design.

Infrastructure and green data storage

If you’re looking for IT inefficiencies, start with the most likely offenders: data centers and servers. Generally speaking, private data centers generate more waste and are less likely to rely on renewable energy sources than cloud providers.

If you have a private data center, look at how you could reduce power consumption without sacrificing performance. Replace legacy devices with modern technology that’s more energy efficient. You might consolidate servers, virtualize servers and storage systems, minimize idle IT equipment and invest in a more intelligent cooling system.

If you’re using a cloud provider, or are ready to make the move, seek out solutions that rely on renewable energy and/or carbon offsets. Many data centers invest in renewable energy resources, such as wind and solar, and purchase energy credits to reach carbon neutral.

But pay attention to green storage claims. A data center can purchase enough green energy credits to claim carbon neutrality, while continuing to rely heavily on fossil fuel-based energy. The use of energy credits should be supplemental to a green storage solution, not the sole tactic.

Think about sustainability when locating data as well. Consider the energy and resources you need to move, route, back up and archive your information. Look for opportunities to reduce the distance data must travel across the network. 

Sustainable data management

Green storage is just one part of the equation. Sustainable data policies are also important. As companies store an ever-increasing amount of data, that data requires more space and more energy. A digitally sober organization will examine its data strategy to make it lean and less energy intensive.

Perhaps the simplest path forward here is to implement data deletion policies. Email, for example, should not be a data storage tool, and many companies will automatically delete messages older than, say, two years. But it goes well beyond that.

Many companies are in the dark about their data — they’ve been accumulating it for years and have no idea what they’re holding on to. Estimates suggest anywhere from 30% to 50% of this data is duplicated, trivial or obsolete.

All that unstructured data creates security risks. It adds costs and delays to migration projects, and it increases your data storage costs. Thankfully, tools and automations are emerging to help organizations analyze and categorize this data.

Consider automating data management to:

  • Improve content visibility (e.g., ensure content is tagged and stored correctly).
  • Deduplicate data.
  • Automatically apply data retention rules.

Sustainable software design

Sustainable software engineering is a growing practice. This approach aims to increase application efficiency while reducing energy and data center space requirements. The Green Software Foundation is one resource helping to pioneer these efforts.

Developers can reduce the environmental impact of an application through a number of strategies, such as designing an efficient cache policy, detecting and fixing unintended loops, limiting computational accuracy to realistic user needs and focusing optimization efforts on features with the highest power consumption and usage.

Development teams can make choices to prioritize ecofriendly frameworks and languages when building systems. For example, PHP uses seven times more energy than JavaScript, while C and C++ are considered the most energy efficient.

Designers and product owners also have a role to play. Ecofriendly design choices can include using standard system fonts, image compression, text-based communication, darker backgrounds and more. Sustainable software design also means paying attention to product iterations and retiring unnecessary features or functions over time.

How Wipfli can help

When it comes to managing technology, you’re already accustomed to making decisions based on security and the bottom line. Now it’s time to introduce sustainability into the IT decision-making matrix. Find out how Wipfli ESG consultants and digital services can help you reach your goal.

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Author(s)

Robert D. Cedergren, CPA, CGMA, CITP, CISM, CISA, CGEIT
Partner In Charge, Risk Advisory Services
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