Creating end-to-end sustainable supply chains is critical to achieve long-term goals

supply chains

Data centres do not exist in isolation. How can collaboration create long-term sustainable data centres, and what challenges remain when creating end-to-end sustainable supply chains?

Sustainability across the data centre industry requires high levels of integration. From the supply chains to commercial partners – all have a critical role to play. And sustainability is imperative, with 97 per cent of colocation customers asking about sustainability, according to 451 Research. With this high level of awareness, are data centres doing enough to develop an integrated approach that supports their ESG credentials?

The business case for a more sustainable approach to supply chains across the data centre industry has expanded for the last decade. Post-pandemic, this drive has certainly accelerated as the customers of data centre services have become more environmentally aware. As a result, multi-tenant data centres are under pressure to improve their sustainability credentials, which all data centres must clearly demonstrate.

“Sustainable credentials are rapidly becoming a very pragmatic and compelling differentiator for datacentres today,” Yona Brawerman, chief strategy and corporate social responsibility officer at OVHcloud, says. “A strong sustainability strategy helps organisations to, for example, stabilise their energy costs, because suppliers and partners are invested in renewable energy. Sustainability is not just a promise to future generations, but also a form of frugality – recycling and re-using servers, for example, results in later purchase avoidance, lowering long-term costs.”

Steen Dalgas, senior cloud economist at Nutanix, adds the the UK government’s sustainability team has recommended that public tenders score 10-20 per cent of tenders on the environmental credentials of the vendor. “Making a Net Zero pledge is likely to be a minimum requirement to bid on business soon,” he says. “We expect this to become important in the private sector, especially for multinational companies who trade within the EU where mandated legislation on carbon will kick in from 2024. In response, Nutanix is taking steps to make its next ESG report much more meaningful with detailed metrics.”

Sustainable partnerships

For a supply chain to be truly sustainable, metrics must be in place to measure current and future initiatives. Often, a focus on emissions targets will be the driving factor here. The Scope protocols are critical to pay close attention to. However, an integrated sustainable business is multifactor and, as such, needs metrics that can illustrate the improvements made to end customers who are placing these measurements onto the SLAs.

Partnerships are also being forged that speak to the changing sustainability landscape that data centres work within. Marc Garner, SVP, Secure Power Division, Schneider Electric Europe, explains their approach: “Today businesses within the data centre sector, and outside of it, are collaborating more closely to ensure that sustainability can truly become a reality with the supply chain,” he explains. “You see this regularly, and a great example is our work with Terra Cloud (Wortmann AG), one of Germany’s key regional colocation data centre operators, where together, we announced a strategic partnership to help accelerate the company’s sustainability commitments.

“Internally, at Schneider Electric, we also see a huge need to work closely with our suppliers to achieve our own commitments, so launched the NEO platform, which is a digital portal where our suppliers can exchange best practices, access training, and collaborate to accelerate the path to Net Zero.”

Technology, not surprisingly, is playing a pivotal role in advancing more integrated approaches to sustainable supply chains. Closely connected B2B partners via hosted platforms, for example, offer a level of visibility across supply chains that is unprecedented. Add to these new forms of automated services, the landscape for sustainable and integrated supply chain services has an upward velocity. For example, IDC’s Supply Chain Survey concluded that nearly half (46 per cent) of their respondents needed supply chain visibility and resiliency to see necessary changes to react effectively.

Brawerman also explains that integrated sustainability means understanding each chain element. “The major challenge to data centre supply chains today is balance,” she adds. Facilitating the digital transformation of our economic landscape today must not endanger the world of tomorrow, so supply chains must be designed and operated sustainably. At the same time, adapting to industry-specific guidelines or providing bespoke services is key. For example, without the ability to flex and create the right secure infrastructure, data centre companies cannot grow into industries that have more sensitive data processing regulations, such as finance and healthcare.”

Connected environments

Connected sustainable supply chains are critical for all data centres that want to become destination brands. Last year’s Supply Chain Survey from IDC was telling in that all respondents stated that sustainability is now a focus, with pressure from enterprises and customers alike driving every sustainability initiative.

“The importance of the supply chain to business success in the modern digital economy means transitioning a functional area that has traditionally been viewed as a cost centre to one that must be leveraged as an opportunity centre — and supported/funded accordingly,” the IDC report concluded. This is a truism indeed for all businesses connected to data centres. How data centres manage their supply chains moving forward is critical to their long-term profitability. Supply chain transformation will lead to resilience – something that many in the industry lacked and which were laid bare by the pandemic.

Sustainable supply chains also need to be resilient and robust. Predicting the future is difficult. No one expected a global pandemic. No one could have predicted the disruption a ship lodged in the Suez Canal would have on global supply chains.

“There is closer cooperation between data centres and their suppliers to create an end-to-end and integrated and sustainable supply chain,” Mauro Cozzi, co-founder and CEO at Emitwise, says “This collaboration includes sharing data on energy consumption and carbon emissions, adopting common sustainability and energy efficiency standards, and working together to reduce waste and increase recycling.

“Data centres are looking outside of their established supply chains to identify new suppliers that are perhaps more agile and have good sustainability credentials. This is driven by the need to reduce risk and build resilience in their supply chains, as well as by the increasing focus on sustainability and carbon reduction.”

In their report, IBM concluded: “The next generation of supply chains will do more than efficiently move material from one place to another; they will model and underpin resilient, agile and sustainable business operations.”

Garner believes data centres can be instrumental in driving more sustainability across the network industry: “Data centre operators at the cutting edge of sustainability are always seeking to look outside of traditional mediums when it comes to pushing the envelope on decarbonisation,” he says. “This often requires them to embrace innovative new technologies, to seek out new consultancies or suppliers, and apply the learned lessons from other energy-intensive industries looking to become more sustainable.”

The architecture of sustainable neo-supply chains is rapidly coming into focus for all data centres. Their environmental footprint is intimately connected to the multiple layers of their supply chains. Reducing complexity is one practical option with a trend towards standardisation when equipment is specified. New data centres are being built with this approach as a foundation of their design.

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