Climate change and technology: does the Government’s “ICT and Digital Strategy” reflect a growing trend towards sustainability in the technology sector?

United Kingdom

The Department for Environment, Food & Rural Affairs (DEFRA) recently published its Greening Government: ICT and Digital Strategy 2020-2025 (Strategy). The UK Government is aiming to reduce its carbon footprint and increase its resilience, responsibility, transparency and accountability in accordance with the UN Sustainable Development Goals. Declaring that “business as usual is no longer an option”, DEFRA have laid out a number of business rules to be applied to all new procurements.

Business rule 1: to meet net zero by 2050

By 2020, suppliers must have committed to science-based net zero targets in line with the Paris Agreement (or procuring department target, whichever is sooner) and have developed carbon mitigation and adaptation strategies.

By 2025, suppliers must have shown clear progress towards those goals.

Business rule 2: circular economy – resources and waste strategy

By 2020, suppliers must have circular ICT policies and strategies and products routinely designed for durability, ease of maintenance and recycling, and must be phasing out problematic materials and substances.

By 2025, suppliers must have established zero waste to landfill or zero-waste targets. Suppliers must show progress in incorporating recycled materials, eliminating the use of single use plastics and purchasing remanufactured equipment.

Business rule 3: to meet transparency and accountability commitments

By 2020, suppliers must comply with the UK Modern Slavery Act and use of the Home Office’s Modern Slavery Assessment Tool.

By 2025, suppliers must help the Government map supply chains to identify high risk areas.

Green policy agenda

This week the Prime Minister set out his ambitious ten point plan for a green industrial revolution to create and support up to 250,000 British jobs. This should keep “green” firmly on the policy agenda as the UK starts out on the path to net zero. The significant investment backing for the plan includes a £1 billion energy innovation fund focused on developing the cutting-edge technologies needed to reach the new energy targets.

Contracting for change

The Public Contracts Regulations 2015 expressly allow Authorities to incorporate social and environmental aspects into public procurements. Reflective of this, a number of Government standard contracts, including the Cabinet Office/GLD model services contract (MSC), already include concepts such as social value considerations, designed to help Central Government Bodies and Local Authorities craft contractual requirements to help them secure wider environmental benefits (and social and economic ones). Suppliers are then required to report on their performance against those requirements. The current version of the MSC includes new environmental requirements, set out in an annex, which have been designed to provide a tailorable starting point for environmental and sustainability requirements in any procurement. It seems clear following publication of the Strategy that we should expect provisions of this nature to be used more regularly, and with more detailed performance and reporting obligations being applied. 

The market response

DEFRA’s Strategy report mirrors a growing market shift towards sustainability and the consideration of environmental factors in the private sector. The large tech players are taking their corporate responsibility in this regard seriously. Amazon, Google and Microsoft have all made significant pledges to achieve carbon neutrality and are investing heavily in renewable power (including through power purchase agreements) as part of their strategy to achieve it. 

As the demand for digital transformation, data analytics, automation, IoT and cloud computing grows, the focus on data center energy consumption continues to intensify. The ever present drive for improved efficiency and reduced power consumption and other running costs, coupled with high-profile warnings of the potential impact of data centers on the environment (such as the BBC’s “Dirty Streaming” broadcast) are  driving data center and cloud infrastructure providers to take steps to manage their carbon footprints, and prospective customers to be more discerning in their selection of providers. And while a number of misconceptions surrounding data center power usage remain (see e.g. the TechUK commentary in this regard), the general market movement towards sustainability and renewable power is clear.

A measure known as PUE (Power Usage Effectiveness) is often used to compare data center energy efficiency. The PUE measure compares a data center’s total energy usage (including, for example, cooling) with that used by the IT equipment itself; the lower the PUE, the more energy efficient the data center is operationally. Under the UK’s Climate Change Agreement (CCA) scheme, data center participants agreed to target a 15% reduction in their PUE (from a 2011 baseline) by the end of 2020. And collectively, “UK operators … performed so well that they fulfilled the final scheme target two years ahead of schedule” (TechUK: Data center CCA results).

While operators of the new hyperscale data centers are excelling in achieving lower than average PUE, others are finding efficiency gains harder to achieve. Although participants in the CCA scheme agreed to an extension of the scheme with new targets, around a third of participants thought that the target reduction of 6.67% was too large, arguing that investments in energy efficiency take longer to develop and implement than the scheme currently allows for. The Uptime Institution Global Data Center Survey 2019 reported that the average PUE of its 624 participants actually rose in 2019, from 1.58 in 2018 to 1.67 in 2019.

According to data provided by the International Energy Agency (IEA), while internet traffic has increased 12-fold and data center demand 7.5-fold in the last ten years, data center energy use has increased by only 3% (equating to ~1% of global electricity use). The IEA argues that this is primarily as a consequence of efficiency gains made in computing and data transmission and a shift from inefficient small data centers to efficient hyperscale data centers.

Clearly other technology infrastructure also has an impact on the environment. Technology lifecycle costs also need to be considered - e.g. in terms of the energy, materials, water etc. expended in producing, distributing, installing, supporting and running equipment and devices, and their useful life and recyclability / end of life disposal implications. 

Similarly, software design has a part to play, with the energy consumption of new platforms and technologies such as blockchain, the foundational technology for cryptocurrencies, increasingly coming under scrutiny. For example, the University of Cambridge’s live online tool suggests that Bitcoin’s energy usage exceeds that of middle-sized countries such as Switzerland and an article in Nature Climate Change suggested that “Bitcoin emissions alone could push global warming above 2°C”. However, the IEA has cited “serious issues in the study’s methodology and assumptions”, suggesting that the use of country average emission factors gives a misleading impression over Bitcoin energy consumption. Nonetheless, in light of concerns over energy usage, some cryptocurrency providers such as Ethereum are seeking to move to more efficient operating models (e.g. by replacing proof of work with proof of stake, an alternative mechanism for distributed consensus).

Comment

Consumer choice is increasingly powered by data, enabling us to make environment-impact informed decisions. Supply chain provenance is now more demonstrable than ever before.  The climate risk and response agenda rightly continues to gain momentum in both the public and private sector. It seems inevitable that environment considerations will increasingly play a more material role in technology buying decisions. Maybe, following on from privacy, security and ethics “by design” we are starting to see the emergence of “green by design” in the tech sector?