It has been beyond doubt for some time that in our data-hungry, always-available world, the environmental performance of data centres has come into sharp focus.

Operators around the globe are making commitments on energy and carbon performance as part of their Environmental, Social and Governance (ESG) programmes and reporting on their achievements as they would their financial performance. The sector’s growth pathway serves to intensify interest in this area as a result of the unique characteristics of these facilities in terms of the intensity and scale of power consumed.

It is still a fact that with the technology and resources available today, most businesses will struggle to become zero carbon entities through the elimination of carbon emissions over which they have direct control. 

After the technically possible reductions have been achieved, there will still be emissions that require neutralising in order for the organisation to achieve a ‘no impact’ state as regards to greenhouse gas emissions. The recently published Science Based Targets Initiative (SBTi) Corporate Net-Zero Standard recognises this fact, providing a pathway to net zero that includes some element of capture and storage of the last elements of carbon not able to be removed by other means.

The challenges of offsetting

This is where we find the real challenge for businesses wanting to pursue an authentic, corporately verifiable net zero pathway. Data centre operators working to a net zero agenda need to make deep and meaningful cuts to their emissions before embracing the, at times, uncertain world of carbon neutrality through off-setting. The challenges of offsetting include:

• Reforestation/afforestation – a freshly planted tree takes years to take up meaningful amounts of carbon. These trees will require protection from the effects of fire, diseases and deforestation for decades to achieve the promised carbon take up. In short, trees can be a risky bet unless permanence can be guaranteed. 
• Additionality – does buying a specific offset lead to a reduction of greenhouse gas emissions that would not have happened otherwise? Determining whether a project is really additional requires scrupulous and transparent accounting and that’s difficult to do, which is why some offsets fail to deliver.
• Double counting – it is vital to ensure that a party claiming an offset has exclusive rights over that offset. Verifying this has been historically difficult and uncertain, especially in the world of international carbon accounting. It remains to be seen whether the Article 6 agreements reached at COP26 will deal with this challenge effectively and that the public and private sectors work coherently on this front.
• Performance – some forms of offset are sold with performance that is difficult to verify. In addition, there are offsets traded on an average carbon footprint basis, as opposed to a quantified footprint that some buyers see as time consuming and expensive to ascertain 

Of course, given enough funding and corporate appetite, it is possible to execute initiatives that provide greater certainty of outcomes without the third-party verification that some of the arms-length offsets truly require. Microsoft’s investment in Climeworks’ direct air capture solution is a good example of this. However, smaller businesses may lack the muscle to participate in these types of technologies in the short to medium term.

A global problem

Going forward, the pathway to net zero becomes steeper when the future growth in data centre construction and operation is considered alongside the levels of deployment in territories with highly polluting coal-powered electricity grids, such as Eastern Europe and the Far East. China’s data centre market is anticipated to deliver a CAGR of over 19% in the period to 2026 for instance. Unless there is rapid decarbonisation, then operators in these territories will continue with the questionable practice of paying for the right to pollute through the purchase of offsets.

The environmental management landscape has changed and there is much more change coming. Offsetting will be with us for the foreseeable future, but significant improvements need to be made internationally for this to function as the world requires. Data centre businesses will respond to the net zero agenda at different rates, and they will have to respond either because of legislation or wider market forces. 

Whilst the web has been an enabler of many things, including a general speeding up of many aspects of commerce and society generally, the sector will be judged on the speed with which it authentically responds to the climate crisis. If not, it faces being labelled one of the world’s dirty industries as the globe strives to satisfy the IPCC’s Carbon Budget.