Data centers are power-hungry – globally accounting for an estimated 2% of electricity, and this is set to grow exponentially – with the daily use of data set to leap from 44 zettabytes at the start of 2020 to 463 exabytes in 2025.
For banks and other financial institutions (FIs), who sit on enormous amounts of data – improving data center sustainability, presents both a challenge and opportunity to minimize environmental footprint, as they intensify efforts to meet net-zero emissions by the year 2050.
Data gives FIs a competitive advantage and as banking becomes more data-driven, data storage can have a meaningful impact on sustainability goals. Whether using onsite, colocation, hyperscale or edge data centers – developing an effective sustainability strategy that covers IT and data infrastructure is an easy decision when it comes to meeting Environmental, Social and Governance (ESG) targets.
In addition to aiding carbon reduction efforts, converged data center infrastructure, which includes compute, storage, and networking components, can enable processor intensive functionalities, such as, artificial intelligence (AI) and machine learning (ML), thanks to enhanced compute, network, and storage access.
The intensive computations and powerful servers required for AI and ML, supercomputing, blockchain/cryptocurrency, and high-frequency trading (HFT) can all benefit from immersion cooling to help lower energy consumption and costs.
HFT relies on low latency, algorithmic trading, and the fastest possible data connections, so co-location and direct connections to the exchange facilitate high messaging frequency. As most are in busy metro locations, with limited power and space, moreover, in addition to high-efficiency cooling, Fis should be looking to incorporate low-carbon energy and software optimization and automation that enables power-aware workload orchestration in such data centers.
Enabling Environmental, Social and Governance (ESG) Metrics
Improving Power Usage Effectiveness (PUE) and ESG metrics require an effective sustainability strategy, however and the Uptime Institute’s Survey of IT and Data Center Managers 2021 reports that energy and PUE are the top sustainability metrics tracked, while only a third say they calculate carbon emissions for reporting purposes.
The Uptime Institute identifies seven areas a sustainability strategy should address:
- Greenhouse gas emissions;
- energy use (conservation, efficiency, and reduction);
- renewable energy use;
- IT equipment efficiency;
- water use (conservation and efficiency);
- facility siting and construction;
- and disposal or recycling of waste and end-of-life equipment.
If banks are serious about their ESG efforts they need to ensure data management addresses all areas of owned, colocation and cloud data centers. They should also encourage collaboration between all stakeholders, including IT management, procurement, compliance, finance and sustainability teams.
While many bank data centers are switching to renewable energy, as part of its transition to net zero emissions, Bank of America has initiated energy reduction, space consolidation and a green utility grid to reduce emissions at its data centers. Goldman Sachs, meanwhile, has teamed up with Accenture and Microsoft to create energy efficient software to run in data centers.
With new ESG legislation for the financial sector, including the Sustainable Finance Disclosure Regulation in the European Union and the Executive Order on Climate-Related Financial Risk in the US, data centers should be at the heart of sustainability actions.
This might include Single-Phase Immersion Cooling to reduce energy costs and environmental impact, using renewable energy, only working with providers that have solid and quantifiable sustainability credentials and investing in smart facilities management, e.g., AI-powered monitoring tools to remove or switch off infrastructure that is no longer needed.
As both large scale users and funders, FIs can demand that data center providers create a sustainable infrastructure to earn their business, and this will drive innovation in more efficient technologies and create reliability and resilience. For the finance industry, data centers are a critical component and sustainability must go hand in hand with operational resilience.
As well as energy savings and cost reductions, green data centers can help banks achieve operational excellence. On the flipside, data center infrastructure has helped drive the digitalization of banking and tools, such as, programmable Software-Defined Networks (SDNs) have helped improve the deployment of banking apps and service delivery. Working together, FIs, data center operators, hardware and software suppliers present a powerful catalyst for change to ensure that the growth of data centers and ESG are not, as first seems, irreconcilable.