How IT executives are advancing sustainability with the cloud

May 23, 2022 | 6 minute read
Rachel Nizinski
Product Marketing Manager
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Sustainability action is a necessity for organizations looking to satisfy stakeholders, prepare their business for the effects of climate change, and reduce their environmental impact. While more organizations are implementing environmental sustainability practices—such as using sustainable materials, becoming more energy efficient, and embedding sustainability into employee training—these efforts alone are not enough to eliminate waste and reach net zero. 

In a recent survey of executives, Deloitte found that more than a third of organizations are only implementing one out of five “needle-moving” sustainability actions. To begin moving the needle quickly, IT executives can help their organizations accelerate sustainability by reducing the environmental impact of IT, facilitating a more circular economy, working with sustainable partners, and leading efforts that support environmental, social, and governance (ESG) measurement and reporting.

Sustainability pressures are becoming policies 

The pressure for more transparent sustainability action is continuing to rise: For the first time, the US Securities and Exchange Commission has proposed a rule to make environmental reporting mandatory. The recently proposed rule would require public companies to disclose climate-related risk management as well as direct and indirect greenhouse gas emissions (scope 1 and 2), eventually phasing in reporting for material emissions from value chains (scope 3).

The EU has long been ahead of the US when it comes to requiring organizations to report on emissions. Last year, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD), which extends the scope of the Non-Financial Reporting Directive (NFRD) adopted in 2014. The CSRD proposal expands the number of companies required to report, introduces an audit and more detailed reporting, and would require organizations to report according to EU sustainability reporting standards

88% of consumers want companies to help them be more sustainable (OnePulse)

Though policies and reporting requirements intensify the pressure for more corporate sustainability action, there is also pressure coming from consumers and employees. According to a PwC survey, 86% of employees prefer to work for organizations that share their values, and 76% of consumers would “discontinue [their] relationship with companies that treat the environment, employees, or the community in which they operate poorly.” This sentiment is matched by the results of a survey from OnePulse, which found that 88% of consumers want companies to help them be more sustainable. 

There’s a growing need for IT sustainability guidance

To address sustainability reporting requirements and demands from customers, employees, and boards, IT executives are stepping up. But amidst ever-changing guidelines and new climate data, knowing where and how to start implementing more sustainable IT practices remains challenging. Research from Capgemini found that only 18% of organizations have a defined sustainability strategy for IT.  

Nonprofits like SustainableIT.org are starting to fill the growing need for guidance by providing benchmarks for ESG measurements. Launched by CIOs and other tech leaders, the nonprofit plans to define sustainable digital transformation programs and provide best practices, education, and training for technology leaders that help support sustainable actions across their operations. 

IT executives can also look to research and consulting firms like Gartner, who recently released a report that provides a framework to help organizations plan for infrastructure and operations sustainability goals.

In addition to peer groups and research firms, IT executives can also use widely accepted measures provided by organizations such as: 

Cloud solutions help reduce the environmental impact of IT 

On-premises infrastructure often requires large amounts of power and additional physical materials to scale. According to estimates from Cloudscene, there are over 8,000 data centers worldwide and these data centers are estimated to account for nearly 1% of global energy consumption.

1 billion metric tons of CO2 can be prevented from entering the atmosphere between 2021-2024 with cloud computing (IDC)

IT leaders can reduce the carbon footprint of their computing infrastructure simply by moving to cloud systems. The cloud can help reduce greenhouse gas emissions, as cloud computing is more efficient than what organizations can achieve with on-premises infrastructure. Cloud data centers have higher utilization rates, use advanced cooling technologies that are more energy efficient, and are often powered by renewable energy. As more businesses migrate to the cloud, these efficiencies are estimated to potentially prevent more than 1 billion metric tons of CO2 from entering the atmosphere over the next few years.  

One customer case study found a 93% reduction in greenhouse gas emissions associated with migrating from a customer hosted Oracle ERP solution to Oracle ERP on Oracle Cloud Infrastructure. This included a 71% reduction in scope 1 emissions, 100% reduction in scope 2 emissions, and 84% reduction in scope 3 emissions (Figure 2). 

The cloud can also promote a more circular economy 

A key tenet of the circular economy is to decouple physical assets from the services they provide. This is exactly what the cloud provides. The cloud can contribute to a more eco-optimized supply chain by eliminating the need to procure and physically own your computing hardware.

Cloud computing can support a more circular economy

As organizations make the transition to cloud, they should also account for the impact that retired hardware has on the environment. To address this, IT executives can look to cloud providers that offer services like Oracle’s take back programs to help dispose of and recycle excess products in an environmentally responsible manner.

IT executives can accelerate sustainability with analytics

More transparency and better emissions data isn’t just about meeting reporting requirements—it’s also an essential component of reaching net zero. IT executives can help accelerate progress towards net zero by leading efforts to measure ESG performance. 

Deloitte found that “difficulty measuring environmental impact” was identified by executives as one of the five biggest obstacles to their sustainability efforts. By investing in cloud solutions and services such as integrated analytics platforms and IoT, AI and ML capabilities, IT executives can embed environmental-related data collection and reporting into the mainstream of business operations and associated IT infrastructure. 

30% of executives identify measuring environmental impact as a barrier to facilitating sustainability (Source: Deloitte)

At Oracle, we’ve been transforming our business operations to be more environmentally friendly by leveraging Oracle’s own innovative technology. Sustainability is now inherent in the way think about and approach nearly every aspect of our business, from operational efficiency, to product development and to employee engagement. We use our own technology because Oracle Cloud is the only end-to-end cloud platform that enables the cross-functional process flows required to increase sustainability.

Partners and providers should meet your sustainability requirements

Providers and partners play a pivotal role in reducing your environmental impact, either helping or hindering your ability to achieve sustainability goals. Ensuring that business partners and suppliers meet your sustainability requirements is one of the five key actions that businesses need to take to realize the benefits of sustainability, according to Deloitte’s 2022 CxO Sustainability Report

Beyond ensuring that your providers align with specific sustainability criteria, it’s also important to consider how they can contribute to changing business needs. As demands for greener products grow, IT executives should be primed to understand not only their risks, but also their ability to act on new opportunities. By partnering with cloud providers that offer advanced cloud technologies and a wide range of services and solutions, you can position your business to capture new value when it arises and do so quickly.

Take a step towards sustainability with Oracle Cloud Infrastructure

Oracle Cloud Infrastructure is a high-performance green cloud solution that provides customers with the opportunity to drive business value and reduce their environmental impact. Oracle data centers are 75% more energy efficient than a typical corporate data center. Because we design, build, deploy, and recycle our hardware, we are contributing to a more circular economy that minimizes waste, maximizes circularity, and helps achieve net-zero carbon. 

By consolidating and optimizing our IT infrastructure while delivering advanced technologies, such as AI and blockchain, we help organizations reduce their environmental impact, measure progress, and achieve their sustainability goals.


Get started today for free. Learn more about Oracle Cloud sustainability and take a step towards sustainability with Oracle Cloud Free Tier.

 



1. OnePulse, 88% Of Consumers Want You To Help Them Make A Difference

2. IDC, Cloud Computing Could Eliminate a Billion Metric Tons of CO2 Emission Over the Next Four Years, and Possibly More, According to a New IDC Forecast

3. Deloitte, Deloitte 2022 CxO Sustainability Report

 

 

Rachel Nizinski

Product Marketing Manager


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