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Why Sustainability is a Business Imperative for Colocation Providers

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By Selena Nimerick, Schneider Electric

The demand for digital is growing. People want everything faster and without interruption. As data centers consume 1-2%[1] of total energy, efficiency is the first step towards sustainability. For years the data center industry has focused on energy efficiency or, simply put, “using less” but the conversation has shifted in a new direction towards sustainability. Many companies use the terms efficiency and sustainability interchangeably, but the United Nations has defined sustainability as: “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. By this definition and given the stakes of our industry, we must do better than just “use less”.  A new white paper from Schneider Electric discusses the four main reasons why data center operators and colocation providers in particular should prioritise sustainability.

Colocation Tenant Requirements

As a leader for Schneider’s customer satisfaction and quality team, I place the highest priority on understanding my customers’ needs so we can meet them now and in the future. Along these lines, the first reason the paper outlines to prioritise sustainability is customer needs. 

According to recent data from 451 Research, colocation tenants are asking for sustainability commitments in their contracts. As companies, including the Internet Giants, take up space in colocation facilities and make public net-zero emissions commitments, they must report their Scope 3 emissions, which are emissions from their suppliers – including their colocation service providers. Scope 3 emissions are generally considered to be underreported and more can be done to address colocation providers’ Scope 3 emissions. To increase reporting of scope 3 emissions, data centers operators can require their vendors provide Type III Environmental Product Disclosures that document the embedded carbon footprint of the product. 

Beyond reporting, tenants are also seeking providers who are reducing their Scope 1 and 2 GHG emissions through Power Purchase Agreements (PPAs) for renewables and alternative fuel sources. Circular economy programs like recycling for parts and batteries are also attractive to ensure waste reduction and reuse of materials. Schneider’s Energy and Sustainability Services works with customers, including some of the world’s largest data center operators, to reduce emissions and negotiate PPAs. In 2020, our offers saved 134 million metric tons of CO2 on our customers’ end.[2] 

Measuring and reporting emissions help to ensure we hold each other accountable for our role in the ecosystem and seek out new opportunities for sustainability. 

Government Regulations

The second main reason colocation providers should prioritise sustainability: Government Regulations. 

Government agencies have kept an eye on the data center industry for years for its use of chemicals as coolants in HVAC equipment, the gas sulfur hexafluoride better known as SF6 , and management of the build-out and use of resources. It benefits data center operators to understand the environmental impact of these elements and include appropriate actions in any sustainability plans. 

Let’s take a closer look at SF6. It is a man-made fluorinated gas that has been used for decades in the medium voltage (MV) switchgear found in data center and other applications. The properties of SF6 made it very well suited for electrical current breaking and insulation. Unfortunately, it has a significant impact on global warming as it’s the single, strongest greenhouse gas. In fact, this gas is estimated to remain in the atmosphere for 3,200 years. Governments have taken action to start to reduce the implementation of equipment utilising SF6 and, in preparation, companies have been developing SF6-free alternatives. 

This trend towards government action is likely to continue as more governments issue sustainability recommendations, which may become regulatory requirements in the future. For more information on SF6 and its alternatives, read the Schneider white paper “How SF6 Alternatives and Digital Technologies Combine to Empower Electricity Decarbonisation and Efficiency.”

Business Value

In the opening of this article, I discussed how colocation tenants are looking for colocation providers who offer sustainability benefits. This leads us to the third driver: Business Value. Without question, having a robust sustainability action plan in place is a competitive advantage as it has become part of a company’s marketing and messaging strategy. But, the business value of sustainability goes far beyond marketing.

As a quality leader for Schneider, high resiliency allows me to have a good night’s sleep and helps me relate to data center operators who lose sleep over any amount of downtime. Today’s innovative, more efficient, and sustainable solutions can also improve the performance of your data center. Schneider recently introduced its Galaxy VL 3-phase UPS, which offers 99% efficiency in ECOnversion™ mode and is a Green Premium product. It also takes up very little floor space as its 50% more compact than the industry average. With Galaxy VL, Schneider Electric introduced Live Swap, a pioneering feature that delivers a touch-safe design throughout the process of adding or replacing the power modules while the UPS is online and fully operational, offering enhanced business continuity and no unscheduled downtime. I have to admit that Live Swap also helps me sleep soundly through the night.

ESG Investment 

The fourth main reason why colocation providers should prioritise sustainability: ESG Investment. 

Today more investment funds are available to companies that are mitigating their environmental impact and making their ESG commitments clear – plain and simple. Most public companies are publishing sustainability reports and adopting their commitments in their governance structure. Funding is available via bonds and some government agencies will offer financing in the form of loans, grants, and other sources for projects that reduce carbon footprint or improve energy efficiency. 

Sustainability is a Business Imperative

Sustainability is more than using less or doing good. It’s critical to address our century’s greatest challenge: the climate emergency. It’s also a business imperative for data center operators who wish to outperform the competition. If you are interested in learning more about the top drivers of sustainability, I encourage you to read Schneider Electric’s new white paper “Why Data Centers Must Prioritise Environmental Sustainability: Four Key Drivers.” 

Selena Nimerick is Vice President of Customer Satisfaction & Quality for Secure Power at Schneider Electric. Follow her on LinkedIn https://www.linkedin.com/in/selena-nimerick-957aa03/



  1. ^ Masanet, Shehabi, Lei, Smith, Koomey, Recalibrating global data center energy-use estimates, 2020
  2. ^ Schneider Electric, Bridging Progress for All, 2020-2021 Sustainability Report, 2020

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