For some companies, the shift from fossil fuels to elector mobility is a matter of survival. However, delivering on decarbonization is a daunting challenge for businesses. Many technology companies, manufacturers, life sciences businesses and healthcare providers, though, are past specialists in change projects and in dealing with disruption and pressures to innovate.
As advanced users or developers of technology and data, these businesses also have a head-start on those in other sectors when embarking on their own net-zero transformation, and they can build on their already-integrated supply chains to drive reductions in emissions from others too.
With businesses still processing what the outcomes from COP26 in Glasgow mean to them, we explore the way that climate-related issues will influence the actions of companies active in technology, and the diversified industrial, life sciences and healthcare sectors.
There has been a tendency for the technology sector to be considered as part of the solution to the problems of climate change. There are legitimate reasons for this, but it must also be recognized that there are climate-related issues within the sector itself to be addressed.
This is particularly visible in the cloud computing and data centers market where energy consumption is coming under increasing scrutiny, both from policymakers and regulators and from investors, in the drive to achieve net-zero.
In Ireland, for instance, concerns have been raised about the growing number of data centers in the country, and the associated increase in energy consumption, and how it could threaten security of supply in the electricity market if the pace of growth witnessed currently goes unchecked. That is why the Commission for Regulation of Utilities in Ireland recently imposed directions on operators of Ireland’s electricity grid that are anticipated to improve the geographic spread of data centers across the country and prompt data center developers to put in place their own on-site power supply.
We know, though, from our own work that many data center operators are ahead of the curve on lowering their energy consumption and finding better ways of using waste heat – the Energy Reuse Effectiveness metric is increasing transparency in this regard.
As the world of finance adapts to the climate crisis and the outcomes from COP26, there is an increasing focus on ‘green’ investments as lenders and asset managers look at channelling more of the funds they are responsible for to environmentally-friendly businesses and projects. This will be a further driver of climate action and sustainability in the technology sector in 2022 and beyond.
Technology companies have a huge opportunity to lend their technologies, skills and expertise to climate-related initiatives,
There has already been significant progress made. Thousands of businesses – many from the technology sector – have joined a global movement by committing to achieve net-zero carbon emissions by 2050 at the very latest. Over a third of mobile operators by revenue have met the UN’s Race to Zero criteria, which is a great achievement, although there is clearly more to be done.
Technology itself can play an important role in enabling the energy transition. The net-zero agenda is acting as a driver for businesses to investigate ways in which they can access or share data to improve efficiency. Data trust models are emerging as a way in which to effectively enable safe and secure data sharing with appropriate controls on access and use. Once data sets have sufficient scale, artificial intelligence tools can be used to look for patterns and correlations to provide insights – the larger the data set, the better the output.
2021 was a year of commitments, 2022 must be the year where this translates into action. Technology companies have a huge opportunity to lend their technologies, skills and expertise to climate-related initiatives, such as the Green Grids Initiative announced at COP26 that looks to interconnect countries, continents and communities to renewable power sources, Mission Innovation that aims to supercharge investment in clean energy, or the joint US and UAE-led AIM4C initiative that seeks to deliver more sustainable agriculture and innovative food systems.
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