Is Your Company Prepared for the New Era of IT Sustainability?

The CSRD is set to become a reality in 2024, with mandatory reporting requirements kicking in from 2025. While penalties for non-compliance will be enforced starting in 2026, large enterprises must start preparing now to avoid last-minute rushes and potential setbacks.

By OxygenIT

Jul 11, 2024

8 mins read

CSRD: Preparing for Mandatory Reporting in 2025

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The Corporate Sustainability Reporting Directive (CSRD) is set to become a reality in 2024, with mandatory reporting requirements kicking in from 2025. While penalties for non-compliance will be enforced starting in 2026, large enterprises must start preparing now to avoid last-minute rushes and potential setbacks. IT companies, in particular, face unique challenges in meeting these standards, but with the right tools, they can turn these challenges into opportunities.

Key Changes Under CSRD:

Scope Expansion: From 11,700 to over 50,000 companies.
Dual Materiality: Considering both the financial impact of sustainability issues on companies and their impact on the environment and society.
Strict Compliance: Mandatory reporting, with verification by independent auditors and potential penalties for non-compliance.

CSRD and What’s Next?

Meeting the CSRD requirements is only the first step. Accurate and detailed measurement of your ESG metrics is the prerequisite for meaningful action. Granularity in data is crucial—without it, executing an effective carbon reduction plan is nearly impossible. IT infrastructure, often the least transparent area, offers the highest potential for impactful reductions.

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IT Infrastructure: High Potential for Impactful Reductions Despite Low Transparency

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IT infrastructure, a critical backbone of modern enterprises, often lacks transparency but holds the highest potential for impactful carbon reductions. As IT operations grow increasingly complex, driven by advancements in cloud computing, data storage, and application deployment, accurately measuring and managing the environmental impact becomes paramount. Here’s a deeper dive into why IT infrastructure is both a challenge and an opportunity for sustainability.

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Facts and Stats:

Significant Emissions: Enterprise technology is responsible for about 350-400 megatons of CO2 equivalent gases annually, accounting for approximately 1% of global GHG emissions. This is comparable to half of the emissions from the aviation sector.
Cloud Migration: Shifting workloads to the cloud can reduce data center emissions by over 55%, equating to around 40 megatons of CO2e worldwide.

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The Complexity of IT Infrastructure

Diverse and Distributed Systems Modern IT infrastructure encompasses a vast array of systems and services, including data centers, cloud platforms, on-premise servers, and various software solutions. These components are often distributed globally, making it difficult to obtain a unified view of energy consumption and emissions.

Dynamic and Scalable Environments The dynamic nature of IT environments, characterized by auto-scaling, load balancing, and frequent updates, further complicates tracking energy use and carbon footprint. Traditional reporting methods struggle to keep pace with these rapid changes, leading to gaps in data accuracy and reliability.

SaaS and Third-Party Services Software-as-a-Service (SaaS) applications and third-party services add another layer of complexity. Companies often have limited visibility into the energy practices of these external providers, making it challenging to account for their environmental impact accurately.

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The Potential for Significant Reductions

Despite these challenges, IT infrastructure offers significant opportunities for carbon reduction. Here are some key areas where IT companies can make substantial improvements:

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Data Centers and Cloud Services

Energy Efficiency Initiatives: Implementing advanced cooling technologies, optimizing server utilization, and adopting energy-efficient hardware can drastically reduce energy consumption in data centers.
Renewable Energy Adoption: Transitioning to renewable energy sources for powering data centers can cut down on carbon emissions significantly. According to a report by the IEA (International Energy Agency), In 2022, data centers accounted for 2% of global electricity usage and it is set to double by 2026. With accurate and granular data, companies are allowed to choose the right data centers and cloud services to reduce their Scope 3 emissions.
Transparency: Many cloud service providers (CSPs) do not publicly disclose their Power Usage Effectiveness (PUE) and carbon factor data. This lack of transparency makes it challenging for companies to perform accurate calculations of their carbon emissions, complicating efforts to develop effective reduction strategies.

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Application and Workload Management

Intelligent Workload Distribution: Using AI and machine learning to distribute workloads efficiently can minimize energy use. For example, running intensive computations during off-peak hours when renewable energy is more available.
Containers: Containers offer a lightweight form of virtualization that can lead to more efficient resource use compared to traditional virtual machines. They allow applications to be packaged with all their dependencies, enabling consistent performance across different environments. Containers can be spun up and down quickly, ensuring that resources are used only when needed, reducing idle capacity and associated energy consumption.
Serverless Architectures: Embracing serverless computing can lead to more efficient resource utilization, as it scales automatically based on demand and typically results in lower energy consumption.

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Data Storage Solutions

Efficient Storage Technologies: Employing technologies like solid-state drives (SSDs) and data deduplication can reduce the energy footprint of data storage systems.
Lifecycle Management: Implementing robust data lifecycle management policies ensures that data is stored, accessed, and deleted efficiently, minimizing unnecessary storage and energy use.

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Network Infrastructure

Optimized Network Routing: Using software-defined networking (SDN) to optimize data routing can lead to significant energy savings by reducing the workload on networking equipment.
Energy-Efficient Hardware: Upgrading to energy-efficient networking hardware can also contribute to overall reductions in energy use.

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Overcoming the Transparency Challenge with OxygenIT

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To unlock these reduction potentials, IT companies need a granular and transparent view of their infrastructure's energy usage and emissions. This is where OxygenIT comes into play:

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Advanced Monitoring and Reporting

‍OxygenIT provides real-time monitoring of energy consumption across all IT infrastructures, offering detailed insights into specific business applications, data storage, and development teams. This enables IT and ESG teams to pinpoint high-emission areas and implement targeted reduction strategies from a single common platform.

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Granular Carbon Footprint Calculation

‍OxygenIT delivers precise carbon footprint calculations by breaking down emissions data into granular levels. This includes specific metrics for cloud and on-premise instances, Kubernetes clusters, containers, serverless functions, and data storage solutions.

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Enhanced Visibility for SaaS and Third-Party Services

‍While measuring the exact impact of various SaaS solutions remains challenging, OxygenIT introduces a disruptive offer by allowing SaaS and Managed Services Providers to use the same carbon footprint calculation methodology and provide their customers with accurate carbon emissions calculated per service. Automatically combined with their own OxygenIT, this ensures that even indirect emissions are accounted for in sustainability reports.

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Scalable and Adaptable Solutions

‍OxygenIT's tools are designed to scale with your IT operations, adapting to changes in infrastructure and usage patterns. This ensures that your sustainability reporting remains accurate and comprehensive, even in dynamic environments.

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Simulation and Forecasts are made available for IT teams to measure the impact of an IT transformation or a new project on the overall carbon footprint. IT teams can make the most accurate decisions taking into account carbon alongside traditional KPIs such as cost, security level, latency, or performance.

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IT infrastructure, despite its inherent complexities and low transparency, presents one of the most significant opportunities for reducing carbon emissions. With the right tools, such as OxygenIT, IT companies can gain the necessary visibility and granularity to not only comply with CSRD requirements but also drive substantial environmental impact.

Ready to transform your IT operations into a model of sustainability? Contact us today to learn how OxygenIT can help you achieve your sustainability goals and turn CSRD compliance into a competitive advantage.

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OxygenIT - Include carbon emissions in your IT decision-making

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In the realm of emissions management and sustainability in IT infrastructure, OxygenIT emerges as a game-changer. By seamlessly integrating carbon emissions considerations into IT decision-making processes, OxygenIT empowers organizations to navigate the complexities of emissions measurement, identify critical hotspots, and implement targeted action plans. With OxygenIT's predictive capabilities, companies can foresee the carbon impact of upcoming IT projects, fostering a culture of environmental responsibility and driving meaningful progress toward a greener future. With OxygenIT at their side, organizations not only optimize their IT operations but also contribute to the broader goals of emission reduction and sustainability, aligning perfectly with any regulatory requirements.