2030 trends for a more environmentally sustainability IT

IT companies are paying increasing attention to environmental considerations and the impact of their activities. The climate crisis, natural disasters and their impact on biodiversity, combined with the energy crisis, are leading to a general awareness of the inherent challenges. This is leading to increased pressure from regulators, investors and shareholders, consumers and employees. Changing business models, designing and operating differently, and reducing consumption are all destabilising factors. The resulting initiatives risk being held back. Integrating future models and innovations now, and instilling a new dynamic that involves thinking and doing things differently, are all assets for contributing to and acting in favour of a more responsible digital economy.

France has ambitious targets for reducing its greenhouse gas (GHG) emissions and decarbonising its economy compared to other European Union countries, and more broadly compared to other countries in the world. The same applies to reducing energy consumption. IT companies operating on the French market are also subject to stricter requirements in this area than in other countries.

Taking this context into account, the AdVaes matrix on trends to 2030 for a IT sector that has less impact and is more respectful of the environment presents the actions that IT companies will have to implement around 4 axes:

1/ Environmental issues;

2/ The impact of applying regulations;

3/ The design and development of products and services;

4/ Practices relating to the operation and use of their solutions.

This list is not exhaustive. There are other areas for development and improvement, specific to each company profile. These actions may or may not be combined, and may have knock-on effects that must also be taken into account (e.g. AIOps on resources). As with any forward-looking exercise, it is complex to prejudge medium- or long-term innovations or related phenomena that may arise and have a direct impact on the forecasts made. These trends are therefore expressed in the light of what is known and appreciable at the start of 2023. 

These trends to 2030 are based on the following 7 issues:

Environmental crisis

According to the IPCC report [2], global temperatures are set to rise by 1.5°C by 2030. The increase in greenhouse gas emissions represents a major challenge for all companies in their fight against global warming. This is particularly true for companies in the IT sector, which are responsible for 3.5% of global greenhouse gas emissions [3].

IT companies are adopting several measures to reduce their GHG emissions. Firstly, calculating these emissions makes it possible to monitor progress and identify areas for improvement. At the beginning of 2023, the majority of players in the sector will only provide assessments for scopes 1 and 2, for which a carbon footprint has been calculated. The calculation of scope 3, which can represent from 67% to over 75% of the GHG emissions of these companies, is lagging far behind, given its complexity.

IT companies will have to complete the scope 3 calculation. They will also have to progressively extend it to other criteria that have a real impact on the environment, such as water, waste and rare metals. They will also have to identify key reduction actions beyond those to which they are currently committed.

Actions on residual emissions, such as carbon dioxide sequestration or the capture of carbon dioxide from the air (i.e. direct air capture or DAC), should be developed, although they are not a sufficient response in themselves.

Regulations and standards

Regulation is a pressure point for IT companies to act responsibly. A number of laws and directives have come into force to reduce the impact of digital technology on the environment. These regulations cover a wide range of areas such as extra-financial reporting, the fight against waste and programmed obsolescence, the circular economy, reducing electronic and hazardous waste, building efficiency, energy efficiency, eco-design, reducing the environmental footprint of digital, etc. They are complemented by adjacent initiatives such as the roadmap for the decarbonisation of the IT sector.

Until now, some regulations have only applied to listed companies, affecting a small number of IT companies (editor's note: IT companies represent 15% of the French CAC 40 and less than 10% of the French SBF 120 at the beginning of 2023). However, the environmental regulations recently adopted by the European Union and France, which should come into force in 2-3 years' time, extend their scope to smaller companies that are not necessarily listed on the stock exchange (cf. CSRD - Corporate Sustainability Reporting Directive). A greater number of IT companies should be affected.

Similarly, assessment and reporting models are evolving to remedy current shortcomings, particularly with regard to assessment and measurement methods. For example, the calculation of scope 3 of the carbon footprint should be reviewed, as each company currently uses a different calculation model, which creates disparities between the results published. Scope 4, which is used to describe avoided emissions, could also be included in the GHG balance sheet.

Standards and certifications also play an important role in the adoption and dissemination of eco-responsible measures. AdVaes analysed around ten major IT companies to identify the most widespread certifications within their organisations: 100% of them are ISO 14001 and ISO 50001 certified by early 2023. LEED (Leadership in Energy and Environmental Design) certification is also encouraged for those operating data centres.

The certifications and standards in the developing market are likely to involve more sophisticated methods, greater attention to the supply chain and greater attention to the environmental impact of the operations of any IT companies.

Energy crisis

Energy consumption in the IT sector has reached almost 14% of global electricity consumption [4]. This consumption is expected to continue to rise, driven by increasing demand for data processing and storage, as well as the growth of connected devices.

More and more IT companies, particularly those operating data centres (data centre operators and cloud service providers), are expected to negotiate global power purchase agreements (PPAs) to meet their growing energy needs while reducing their carbon footprint and supporting the development of renewable energy (RE) sources. Some are also investing in the production of renewable and low-carbon energy on their campuses for possible self-consumption (e.g. solar, wind, geothermal, biomass, hydrogen, etc.).

Other solutions are also likely to develop, such as edge computing to process data as closely as possible. Edge computing can help reduce energy consumption by reducing the need to transmit data over long distances.

In addition, improved design, increased virtualisation and pooling of processing resources(through the cloud computing model), the development and adoption of energy-efficient technologies (e.g. next-generation servers and energy-efficient storage systems), and the recovery of waste heat where possible, are expected to play a key role in reducing energy consumption in the IT sector.

Water consumption

On a global scale, the OECD estimates that demand for water has increased twice as fast as population growth over the last century [5]. Water is essential in the IT sector, whether for the production of equipment (extraction of minerals and manufacture of processors) or for the cooling systems used by certain data centres.

With the increase in data processing (i.e. ‘compute’) and storage resources, IT companies' water consumption has also risen. IT companies should therefore look at all possible ways of reducing their water consumption, particularly in water-stressed regions. Their actions will include increased use of waterless or highly water-efficient cooling systems, such as immersive cooling. These systems can reduce the amount of water needed for cooling by up to 90% compared with traditional methods. Recycled and non-potable water sources, such as grey water and rainwater, will also be used as an alternative. The future of water consumption in the IT sector is likely to be shaped by a combination of technological innovation, more efficient use and a growing interest in sustainability.

Waste, circular economy and eco-design

E-waste has adverse effects on the environment and human health. It is imperative to reduce its production, preserve the precious resources it contains (cf. rare metals), and adopt a more sustainable and virtuous model by promoting the circular economy.

The design of electronic products around models that are easier to repair, update and recycle should be accelerated. Similarly, their manufacture should include fewer environmentally toxic materials and more recycled components (cf. plastics, for example). IT companies should systematically buy reconditioned equipment and repair and resell used equipment (servers, network equipment, computers, smartphones, etc.). Discussions should be opened around concepts such as open hardware.

These circular economy concepts should also be applied to the fields of digital applications and services, by promoting approaches based on code reuse, APIs (application programming interfaces), microservices and serverless, reverse engineering (cf. open source) and no code/low code development.

In addition, IT companies should carry out life cycle assessments (LCA) to better understand and manage the environmental and social impacts of their solutions. The use of digital tools and data analysis are likely to play a greater role in these LCAs, enabling more accurate and effective assessments. To this end, collaboration between IT companies and their industrial partners could be strengthened in order to establish common LCA methodologies and parameters. The overall objective is to foster continuous improvement and innovation in the sector for a more sustainable and responsible future.

IT operations and exploitation

A shift in focus is expected in IT operations, with a transition from FinOps to GreenOps. This involves moving from performance and efficiency to sustainability and environmental impact. This transition should be driven by the growing demand for sustainable and environmentally friendly technologies. It represents a crucial step towards the creation of a more sustainable and environmentally friendly IT sector. It should play a key role in reducing the sector's environmental impact.

To act on the right levers and implement the right improvement actions, it is essential to measure and monitor over time. Observability and monitoring tools will increasingly need to incorporate components that enable environmental criteria to be measured. The growing complexity of the IT systems to be operated and the need for a more global view of IT operations, including their impact on the environment, will drive the consolidation of observability and monitoring. Predictive monitoring will also make it possible to identify action levers more quickly and improve their performance. Moving from siloed monitoring to consolidated monitoring is a critical step in improving the effectiveness and efficiency of IT operations, which are increasingly taking account of the environmental dimension.

Over and above this, the aim is to extend the lifespan of equipment and optimise data processing (differentiated data collection, volume reduction, reduction in associated network traffic, storage optimisation, etc.). In this respect, artificial intelligence and machine learning technologies should make it possible to support AIOps and MLOps-type approaches.

Responsible purchasing

IT companies are aware of the environmental impact of their activities and supply chains, and are setting targets to ensure that their products and services are designed in a responsible and sustainable way, including through eco-design approaches.

The French government has produced a practical guide to responsible IT purchasing [6], which should help both the service providers offering solutions and the organisations consuming them. In addition, certifications and other labels dedicated to responsible purchasing (cf. "Label Relations Fournisseurs et Achats Responsables") should reinforce the duty of transparency and evaluation of the practices and performance of these IT providers, and set sustainability objectives and measures to assess their progress. In this area , the use of software tools and data analysis are also likely to play an increasingly important role in helping companies to make informed purchasing decisions and to evaluate the performance and progress of their suppliers.

‍

[1] Data centre operators, cloud service providers (IaaS, PaaS, SaaS, etc.), IT service companies, software vendors, IS integrators, resellers, etc.

[2] IPCC - Climate Change 2021

[3] The Shift Project - Environmental impact of digital technology - 5-year trends and 5G governance - March 2021

[4] France Stratégie - Digital energy consumption: the impossibility of controlling consumption growth through technological progress alone - October 2020

[5] OECD - Environment: Air, water and soil - 2005

[6] Mission interministérielle Numérique écoresponsable - Guide pratique pour des achats numériques responsables - April 2021

‍