Many companies are now reporting on sustainability as a supplement to financial reporting to demonstrate their commitment to Environmental, Social, and Governance (ESG) programs.
For companies in the data center industry or wishing to report on their data center operations, our premium sponsor Schneider Electric proposes 5 categories for environmental sustainability reporting metrics – energy, greenhouse gas emissions, water, waste, and local ecosystem.
As the world becomes more automated and digital, the data center industry is undergoing rapid growth to support this transformation. But growth has to be done in an environmentally friendly way. Data center operators are making commitments on environmental sustainability as part of their Environmental, Social, and Governance (ESG) programs. In addition to social and environmental responsibilities, there are other drivers for reporting progress on sustainability. These drivers covered in White Paper 64, Four Key Drivers for Colocation Data Centers to Prioritize Environmental Sustainability, include customer requirements, impending regulations, adding business value, and attracting or qualifying for ESG investments.
Data center operators should use a standard set of metrics. Without standards, data center operators and those wishing to evaluate data center performance (e.g., investors, regulators, employees, etc.) face the following challenges:
Benchmarking – When organizations use different metrics, it’s difficult to compare data center performance. Without benchmarking, it’s difficult to establish common criteria and establish leaders that a data center operator can compare against or aspire to. In short, standardized metrics provide a ledger for comparison and benchmarking for companies that aspire to differentiate through sustainability.
Alignment – Lack of standard metrics can make it difficult to identify organizational discrepancies between divisions / operating units and executive management functions (CEO, CFO, COO and CSO – chief sustainability officer). Standardized environmental metrics are needed to set goals & strategies, know where to improve, know what to prioritize, and to show continuous progress, ensuring all players are using the same rulebook.
Choosing standardized metrics to report sustainability is a key to solving the above challenges. For example, before The Green Grid (TGG) proposed power usage effectiveness (PUE) in 2007, there was no standardized metric to measure the energy efficiency of a data center in whole, which led to benchmarking and alignment challenges in the data center industry. While no metric is perfect, if it is standardized and has a clear definition and application, it will be useful and serve to move the industry forward.
The PUE metric was widely adopted and helped drive data center efficiency improvements across the industry. A global survey conducted by Uptime Institute in 2022 showed the average annual PUE of large data centers improved from 2.5 to 1.55 since 2007. Furthermore, the PUEs of some internet giant data centers such as Google, Facebook, Baidu, and others have been reported to be as low as 1.1. This PUE example demonstrates the importance of standardized and well-understood metrics in reaching an organization’s stated sustainability goals. As shown in Figure 1, data center operators first set their overarching company goals and then select the metrics, set metric targets, and measure their progress towards the goals year over year. We recommend that data center operators consult frameworks and standards for each of these steps.
We focus on the steps within the blue dotted-line boundary. We propose five metric categories for setting goals and identify a list of standardized metrics with definitions and applications across these five categories, and we also provide published industry-based target values for key metrics.
Note, corporate sustainability is made up of three dimensions: Environmental, Social, and Governance (ESG). This paper focuses solely on environmental sustainability and is an update from version 1 released in December 2021 and will be updated as frameworks and metrics evolve.
Read more about environmental sustainability metrics for data centers in the white paper "Guide to Environmental Sustainability Metrics for Data Centers".