The countdown has begun. From 2025, the Corporate Sustainability Reporting Directive (CSRD) includes new Sustainability metrics for the first time. It will mean businesses across the European Union must collect the relevant data to report a full year back for 2025 submissions.
To meet this new reporting directive, a business will be required to estimate its carbon footprint across its entire IT estate – from Cloud platforms to end-user equipment, to on-premises datacenter equipment, and so on – to remain compliant.
What new metrics will businesses have to report on?
All sustainability reporting directives, such as the CSRD European Sustainability Reporting Standards (ESRS), are referring to the Greenhouse Gas (GHG) Protocol and various ‘Scopes’ that focus on different elements of GHG.
For IT, the main elements of GHG to be aware of are:
- Scope 2 – the ‘usage’ emissions that come from running devices. The business is responsible for estimating (or measuring) these emissions.
- Scope 3 – the ‘embodied’ emissions that come from the manufacturing and recycling of the assets you are using or the services you are buying. The business is responsible for getting this information from its suppliers.
How will your business work out these elements for Cloud?
When it comes to how this applies to Cloud consumption, the data collection process is easy… in theory. Both Public or Private Cloud (if not internal) is considered a service you are buying, and therefore falls under Scope 3. The supplier must give you the information to add to your Scope 3, based on its Scope 2 and 3 calculations.
In real life, however, it’s not that easy. Not all Cloud providers calculate ‘usage’ emissions in the same way. Some base figures on locally produced energy, others base it on market-rate energy; some take manufacturing and recycling into consideration, others don’t, and so on.
This lack of transparency on the calculations makes it impossible to compare. But luckily, there is a way to extend your FinOps data with GreenOps data in a standardised way across the major Cloud providers. You can use your billing data – i.e. what you used and for how long – to cross check against dedicated, independent energy sources to convert it into carbon emissions. Yes, doing this yourself may take more resource but it means you’ll have data that you can trust to add to your Scope 3 reporting.
So, what about end-user devices?
Working out the manufacturing (‘Scope 3’) emissions should be more straightforward as manufacturers can provide you with the numbers you need, and even if not, you can rely on independent sources. The true challenge for end-user devices comes from working out the energy usage (‘Scope 2’) of running them.
It could be impossible to establish the energy used and carbon impact for all end-user devices when hybrid working as all the values will differ. An acceptable solution may be to find the average electricity consumption to estimate the emissions.
This way of working out usage may not be perfect but most emissions (84%) for end-user devices come from manufacture rather than usage anyway. Given this, it is even more reason to ensure that your Configuration Management Database (CMDB) is updated by an auto discovery and topology engine, to save you time and improve the quality of your data.
Finally… what about on-premise data centres?
For on-premise datacentres, the situation is almost the same as for personal equipment except one thing: we must invert the ratio between usage and manufacture, as 85% of emissions come from usage.
For this, you can’t use the average energy consumption without the risk of really underestimating the real situation. One relevant option is to extend Observability metrics with energy consumption so that you will have an accurate number to report and work on.
You will also need to look at manufacturing (‘Scope 3’) emissions, but given the ratio here, these will likely play a far smaller role in the overall contributions.
To report your non-financial data with confidence, you will need to start summarising all your IT assets from today – whether on-prem or in the cloud – but accept that it likely won’t be perfect from day one.
It is a complex process (as we addressed above), but if done right, you’ll be able to create actionable insights that will allow your business to reduce its carbon footprint. And ultimately, that is what we should all be driving towards.
- Infrastructure & Cloud
- Sustainability Technology