Sustainability Investments to Increase as ESG Reporting Receives Growing Levels of Enterprise Attention
By 2025, the carbon emissions of hyperscale cloud services will be a top three criterion in cloud purchase decisions, according to Gartner.
As environmental, social and governance (ESG) priorities and reporting received growing levels of enterprise attention, more than 90% of organizations increased their investments in sustainability programs since the start of the pandemic compared to investments in 2017.
“Leading providers of cloud infrastructure and platform services are increasingly focusing on how they can disrupt higher-level business, compliance, societal and environmental issues,” said Ed Anderson, research vice president at Gartner.
Hyperscalers are aggressively investing in sustainable cloud operations and delivery, aspiring to eventually achieve net zero emissions within the decade, or sooner. Report expects increased availability of tools that help organizations calculate and reduce their carbon emissions through effective use of cloud services, similar to tools that assist in optimizing cloud spending today.
The top 10 largest cloud providers (by revenue) accounted for 70% of all IT spending on cloud infrastructure, platform, and application services, according to Gartner. Cloud sustainability initiatives will start with the leading cloud providers, which are some of the world’s largest data center operators and critical to reducing IT-related carbon emissions.
Sustainability metrics and workload placement tools are still immature and not always transparent, making it difficult for organizations to assess true sustainability impacts of their cloud usage today completely and accurately.
As stakeholders continue to push organizations to improve their sustainability posture, the more progressive providers will share their sustainability information publicly. Increasingly, stakeholder pressure will prompt them to include it in company disclosures, compliance, and reporting.
“While essentially all cloud providers have sustainability initiatives in place, their progress in meeting carbon reduction goals and strategies for achieving net zero carbon emissions varies wildly,” added Anderson.