Group3_B | SDG 9: Industry, Innovation and Infrastructure

Introduction

SDG 9- Industry, Innovation and Infrastructure, promotes developing robust infrastructure incorporating inclusive and sustainable innovation. This SDG is one of the most relevant ones for businesses in the private sector. Creation of new products and services is essential for the longevity of any company. It also aims to mitigate the environmental impact of industries through effective utilisation of available resources. Innovation can spur growth and create new jobs and incomes, thus improving the overall standard of living. Developing countries are lagging in innovation because of lower education levels and lack of resources. SDG 9 stresses the importance of domestic technology development and research in less developed countries and the need for access to the internet all around the globe.

The myopic view of including only modes of transportation and essential utilities under infrastructure has been challenged by the proliferation of digital infrastructure in recent years. This claim is validated by observing the graph of annual spending on cloud infrastructure worldwide from 2013 to 2024.

Source: https://www.statista.com.xlrij.remotexs.in/statistics/503686/worldwide-cloud-it-infrastructure-market-spending/

The COVID-19 pandemic which forced many companies to adopt digitisation rapidly, will fortify this trend to an even greater extent. While there are benefits in terms of cost and flexibility to the shift to cloud computing, the environmental impact of the increase in number of digital devices, telecom infrastructure and data centres is far too much to be ignored.

The share of households worldwide with access to computers has nearly doubled from 27.3% in 2005 to 49.7%[1] in 2019. As per the report of SMART 2020 issued by The Climate Group and Global e-Sustainability initiative in 2008, the emissions will double from 2008 to 2020, with laptops overtaking computers as the main source of global ICT emissions (22%) [2]. The same report also cited that mobile phone ownership will almost double to 5 Billion users, and broadband will reach to almost 900 million accounts over the same period, causing a similar uptick in the emissions.

But perhaps the element from the digital infrastructure which has the most detrimental impact on the environment are Data Centres which consume 1% of the total electricity produced worldwide [3]. It was estimated that by 2020, they will account for 45% of the total ICT Industry carbon footprint, which was at 12% in the year 2010 [4], indicating a surge in the emissions as digitisation increases.

Having established the impact of digital infrastructure on this SDG, we will now explore its relevance to India and the implications to businesses.

Relevance of SDG to India

With a burgeoning middle class and one of the world’s most competitively priced internet services, India has been witnessing a data boom which is unparalleled. The government too has been giving considerable impetus across industries to develop and migrate to digital infrastructure. Successive governmental policies have sought to further bolster digital infrastructure in the country, right from the UIDAI to the demonetization and its push to a digital economy. This, coupled with the stringent upcoming data localization laws, put the country in a unique need for hyper-scale data centres.

Along with the domestic demand, India also seeks to become a competitive environment for global data centres with the average cost of mass data storage being 20% and 50% lower than the Chinese and the world averages. These low costs and the PLIs associated are slowly paving the way for global data centres to migrate to India.

In turn, the sustainability associated with the industry comes into question, especially when there are no explicit established norms or guidelines for the same. This is in stark contrast with other countries, Australia, for instance has incorporated the environmental impact of these data centres through NABERS, the national environmental rating agency. With the environmental impact of these data centres becoming more visible, calls for setting standards to the BEE have risen. All of this in entirety, makes this sustainable development goal, especially relating to digital infrastructure and the challenges associated with it, highly relevant to India.

Business Implications and responses

Whenever the masses awaken for a cause, the governments change policies, and businesses have to adjust. A similar thing happened after the adoption of Sustainable development goals in 2015. Industries that were significant consumers of electricity had to shift to reinvent and readjust their power consumptions, not immediately but in the longer term.

The data centre industry is one of the most energy-intensive sectors and, due to this, ends up being responsible for almost 2.3% of the greenhouse gas emissions globally [7]. This vast supply used to be fulfilled by energy generated through non-renewable energy. In 2015, India's government initiated the International Solar Alliance to ensure that we tap this green energy source to provide SDGs commitments. This was the first cue to the industries that they will have to bring about a shift in their power sources.

Another cue was the revision in the ISO14000 family of standards. ISO 14001 was revised in 2015 [8] to include the dimensions that support SDGs. Even though voluntary, the adoption of such standards helps improve the quality and perception of the companies.

Above, combined with the Renewable Purchase Obligations under the Electricity Act of 2003 [9], makes it imperative for the companies to seriously ponder their energy sourcing. While companies can fulfil these obligations by purchasing renewable purchase certificates, it becomes difficult for the like of Amazon Web Services (AWS) and Google cloud to offset their obligations through these paths. This, again, forced the companies to take steps to become more environmentally conscious.

Currently the top 3 providers of Cloud computing services (which are hosted on data centres) across the world are AWS, Microsoft Azure and Google Cloud. The Business implications of this SDG -9 can be studied by the measures undertaken by these 3 key players to minimise their carbon footprint.

Google Cloud

As per the company’s sustainability report they aim to fully decarbonise their electricity supply by 2030 and operate solely on clean energy. It also claims that Google Data centres are twice as energy efficient as a typical enterprise data centre. This has been achieved by utilising machine learning to analyse and control data centre cooling systems which has reduced the energy consumption by 30% [10]. Machine learning is also used to optimise energy savings at data points from sensors. This machine learning technology is also offered to commercial buildings, data centres and industrial facilities for autonomously controlling Heating, Ventilation and Air-Conditioning (HVAC). This indicates the potential of developing technologies to achieve sustainability and curating them as services for sale.

As compared to their performance in 2015, Google Cloud data centres can deliver seven times as much as computer power in the same amount of electricity.

AWS

In Line with Jeff Bezos long term commitment to power all of Amazon’s Data centres with 100% renewable energy, Amazon entered into power purchase agreements with three new windfarms and six solar farms. However, as per a report from Greenpeace, Amazon’s largest data centres, are using only 12% of its total energy requirement from renewable sources [11]. However, Amazon is promoting AWS in the oil and petroleum industry for exploration, drilling and production.

In addition to achieving energy efficiency, AWS has also aimed to reduce the amount of potable water required for the cooling of Data Centres. This is achieved by evaluating climate patterns for each AWS region and co-ordinating with local water management. In its first data centre in Northern Virginia, the company utilises contaminated water released from households and recycles it for cooling of data centres [12]. This presents an opportunity, of saving precious resources like potable water which would have been wasted otherwise for cooling of data centres. This is line with SDG – 6 of ensuring availability of Clean Water and Sanitisation to everyone by utilising contaminated water for cooling purposes so that potable water can be utilised for drinking and other purposes.

Microsoft (Azure)

In 2018, Microsoft’s Project Natick team installed a Data Centre underwater in the Northern Isles on the sea floor. After conducting extensive studies for 2 years, the idea of deploying underwater data centres was deemed to be feasible. The idea behind the concept was to provide data centres near to coastal cities thereby shortening the distance for data to travel and speeding up video streaming and web surfing. The final findings of the team concluded that the data centres under water were more efficient than those deployed on land as the surrounding water acted like a sink for the heat generated by the data centre. [13]

If Microsoft were to employ this technology for its Azure Services and deploy more and more underwater data centres the heat that is dissipated into the ocean would lead to a further rise in the oceanic temperatures and exacerbate the effects of climate change. It could also prove harmful to marine life thereby being in direct violation to SDG 14 – Life Under Water.

Analysis:

As a growing number of organizations aspire to be the market leader in today's data-driven economy, the data centres (the repositories for billions of gigabytes of information) as a business infrastructure become necessary.

However, it is also estimated that the energy consumption by the world's data centres will treble in the next ten-year, putting enormous stress on the supply of energy and causing a significant blow to the efforts to contain global warming.

38% of the total energy goes to cooling IT equipment[15]. Many industry experts recommended building data centres in cold countries, which was implemented by Google [16]. With countries' aggressive data localization policy picking-up, colder climates beyond borders is no longer a viable option.

However, the current ongoing trend of hyper-scaling data centre setup can be used for an energy-efficient design and adoption of the latest technology so that companies can ensure that the facility can be operated, maintained, repaired, and refurbished easily. This allows moving into a more circular use of materials and smarter, cleaner way of consuming energy and water.

With companies moving towards renewable energy, AI is playing a significant role and innovation is at its peak.

Reduction in carbon footprints of data centres has very high potential. Government regulations alongside strengthened industry-wide standards and increased public pressure is desperately needed if we aspire for any long-term and meaningful change. Yes, there is some movement, but the pace is frustratingly glacial, and it is evident that there's still a long way to go.

Way Ahead

There has been a large wave of awareness about the inefficiencies in data centres, especially with respect to the scale of power consumption on a global scale. However, alternatives like peer-to-peer data management systems are simply not viable in the present scenario as they are still in very nascent stages and the advantages offered by data centres are too great. In the age of big data, a switch over seems impossible. As such, data centre optimisation is the best way forward.

To this end, Dell has developed the Enterprise Infrastructure Planning Tool (EIPT). This tool is designed to be able to model a full rack with any server, storage and network equipment that would be deployed. It gives power usage in watts per hour and can be used to easily optimise data centre design. There has been a push for vendors and parts manufacturers to publish data on the environmental impact of their goods. Capgemini’s recent UK data centre, Merlin, boasted an industry-leading Power Usage Effectiveness (PUE) rating of 1.10, which made it an industry leader and prompted other companies to follow suit [16]. In 2020, standard industry practises include using renewable energy when possible and increasing efficiency in the cooling systems.

Another important aspect is the disposal of technological equipment and good sustainability ends with correct disposal, not just at the end of the lifetime of the products.

The world is changing rapidly and with it is changing the way industries are run. Data being the new oil, the onus is now on the data centre industry to lead the way towards sustainability. While the larger players have started taking cognizance, they still have a long way to go.

[1] https://www.statista.com/statistics/748551/worldwide-households-with-computer/

[2] http://www.ictliteracy.info/rf.pdf/make-it-green-cloud-computing.pdf

[3]https://www.datacenterknowledge.com/energy/study-data-centers-responsible-1-percent-all-electricity-consumed-worldwide

[4] https://www.thealternative.org.uk/dailyalternative/2019/5/19/data-centres-energy-use

[5]https://www.cushmanwakefield.com/en/singapore/insights/blog/india-poised-for-massive-data-center-growth

[6]https://www.financialexpress.com/opinion/making-data-centres-greener-the-bureau-of-energy-efficiency-should-come-out-with-standards-and-labelling/2132429/

[7] https://www.data4group.com/en/csr/how-do-we-reduce-the-environmental-footprint-of-data-centers/

[8] https://asq.org/quality-resources/iso-14001

[9] https://rpo.gov.in/Home/Objective

[10] https://www.gstatic.com/gumdrop/sustainability/carbon-free-by-2030.pdf

[11]https://www.wired.com/story/amazon-google-microsoft-green-clouds-and-hyperscale-data-centers/

[12] https://sustainability.aboutamazon.com/environment/the-cloud/data-centers