Your data’s environmental journey
Sometimes, major events are unheralded, or go relatively unnoticed. Sometimes, they creep up on you. One such watershed moment for the data industry is coming up, quietly; the introduction of the EU’s CSRD – the Corporate Sustainability Reporting Directive.
While the entire world, seemingly, has been focused on Chat GPT and Generative AI this year, and for the most part studiously ignoring the vast amount of energy and water it consumes, the EU has quietly passed into law changes to its requirements on sustainability reporting for businesses. I say quietly because this was actually done in January, but as that roughly coincides with the beginning of the ChatGPT era, this still appears to be news to many people.
These changes don’t specifically impact data organisations; it’s across the entire board. But let’s be honest, data organisations and CDOs have had their head in the sand about their carbon footprint. Most CDOs don’t report on the true environmental impact of their data and when they do, the answer is typically “oh, it’s okay, I’ve moved it into the Cloud”.
This doesn’t necessarily actually reduce carbon footprint at all (as it depends where in the world, and indeed country region, the data centre is and what energy source powers it, as well as other factors), but what it does do is move the emission classification to Scope 3; in other words, it is part of your supply chain, but not your direct responsibility. More importantly for reporting purposes, at the moment, businesses are only obliged to report on Scope 1 and 2 emissions – those that you are directly responsible for producing as part of your business or the delivery of your product or service. So, by moving data into the Cloud, you have moved it out of your reporting requirements – the environmental equivalent of moving it off the books.
And this is where the CSRD comes in. Because from January 2024, European businesses, or European divisions or subsidiaries of businesses headquartered elsewhere, will have to report on all emissions and what they are doing about it, including Scope 3 emissions. Whilst this affects all areas of the business, this will mean that data organisations will need to understand and report on, and then act upon, all areas of their activities. And that will include demonstrating the carbon footprint of your data. Whilst it’s true to say reporting isn’t the answer, it is the start of the journey; without it, you don’t know where you are. So, it is an important first step on your data’s environmental journey.
What companies within and outside of the EU can expect of new European ESG regulations – Thomson Reuters Institute