Sustainability reporting is crucial for organisations to track and reduce emissions; however, the digital infrastructure supporting these reports, such as cloud storage, ESG software, and data processing, consumes significant electricity.
According to Position Green, a considerable portion of this electricity comes from fossil fuels, adding to the environmental burden.
As organisations refine their net-zero strategies, the carbon footprint of their reporting processes often remains overlooked. Questions arise about the energy consumed by sustainability data management and whether these activities could be increasing Scope 3 emissions through inefficient workflows.
Significant volumes of ESG data are collected and stored from various sources, including internal operations and third-party providers. This data requires energy-intensive processing and storage, contributing to IT-related Scope 3 emissions.
Key sources of these emissions include cloud computing, which is responsible for 1-1.5% of global electricity usage—a figure set to double by 2030, according to the International Energy Agency. Furthermore, each email, file transfer, and video call incrementally increases emissions, with a single email attachment potentially generating up to 50g of CO₂.
By consolidating ESG data into a single platform, organisations can decrease redundancy, reduce storage needs, and minimise unnecessary digital emissions. This approach not only lowers the costs associated with cloud storage but also reduces the time and energy consumed by processing duplicate data across multiple systems.
Despite the reliance on digital platforms to track and report ESG performance, not all data management workflows are optimised for efficiency. Common inefficiencies include unnecessary daily data refreshes, the use of disjointed tools for different sustainability metrics, and high-frequency data transfers which significantly increase energy consumption.
Organisations can reduce their digital carbon footprint by optimising data storage, streamlining workflows, and choosing low-impact IT infrastructure. Practical steps include:
Optimising cloud storage use and software applications, reducing redundant data storage.Reducing the frequency of data updates and limiting high-frequency report refreshes to essential metrics only.Selecting cloud providers that use renewable energy and considering low-emission data centres.Reducing digital communication by sharing ESG reports via links instead of email attachments and optimising internal reporting schedules.
For a comprehensive environmental impact assessment, organisations should include IT-related emissions in their Scope 3 reporting. By tracking emissions from cloud computing, data storage, and digital communications, companies can identify significant sources of emissions within their digital infrastructure.
A hypothetical scenario illustrates that switching to a cloud provider powered entirely by renewable energy could reduce a company’s IT-related emissions by up to 40%.
While ESG reporting is essential for tracking corporate sustainability, the way companies manage and store data plays a critical role in their overall environmental impact. By optimising digital workflows and choosing sustainable IT solutions, companies can significantly reduce their carbon footprint, demonstrating a genuine commitment to sustainability.
Investors
The following investor(s) were tagged in this article.
