October 24, 2023
Supercharging sustainability for businesses with cloud computing
Around the world there is increased focus and scrutiny on the impact businesses and consumers are having on the environment. With sustainability and “going green(er)” as a hot topic across private and public sectors in almost every industry, cloud computing could be the key for supercharging sustainability for businesses. From reducing total cost of ownership (TCO) to reducing overall carbon footprint through cloud infrastructure, as well as longer term benefits such as security and innovation, the benefits of cloud computing are well-documented.
Corporate social responsibility (CSR), a business model that aims for a company’s activities to enhance the world around them, has existed for a long time, but in recent years, more and more businesses – particularly technology companies or those driving digital transformation – have been seeking to do more activities that address climate change from a digital perspective.
Why should businesses care about environmental impact?
While attitudes and levels of passion towards fighting climate change vary consumer-to-consumer, Deloitte research has shown that as consumers become more engaged with sustainability and environmental issues, they expect the same of business. According to the consulting giant, 65% of respondents expect CEOs to do more to make progress on societal issues – including making business supply chains more sustainable. Additionally, it found 42% of consumers have changed consumption habits because of a company’s stance on the environment, and younger consumers (ages 18 to 24 years old) are three times more likely to switch brands based on values than those 65 years old and above.
In another study, Deloitte research has found that since 2020, 40% of consumers have chosen brands that have environmentally sustainable practices and values, and 35% of consumers say that having a transparent, accountable, and socially and environmentally responsible supply chain influences how much they trust a business.
Consumer attitudes aside, companies should note that G7 finance ministers are committed to mandate climate reporting in line with the recommendations of the task force on Climate-related Financial Disclosures (TCFD). While a universal standard does not yet exist, environmental, social and governance reporting (also known as ESG reporting) does exist in the form of regional reporting frameworks, voluntary standards, and national legislation that vary significantly.
As a result, the above has led investors in recent years to become more aware of the importance of ESG criteria in their investment decisions; which has then led many businesses to start integrating ESG into their operations and business strategies.
How can cloud computing lower carbon emissions and help companies go greener?
An IDC (International Data Corporation) forecast showed that the continued adoption of cloud computing could prevent the emission of more than 1 billion metric tons of carbon dioxide (CO2) by 2024 if datacenters continued to follow sustainable practices.
The cloud has become the default solution for businesses looking to cut costs while enabling scalability, security, and flexibility of their operations. It can help companies to reduce the overall amount of energy needed for data storage, and cut their carbon footprint.
Numerous independent studies have demonstrated the cost savings that organizations can achieve by migrating to the cloud. For instance, an IDC study estimated that AWS customers have a 51% lower cost of operations compared to running on premises infrastructure.
According to Gartner’s research, 95% of companies will be using the cloud by 2025, and according to industry figures, companies can save 15-40% on infrastructure costs by migrating to the cloud, with the top three reasons for doing so as: reducing IT costs, increasing agility and flexibility, and improving disaster recovery.
So, how does cloud computing represent an environmentally friendly option for supercharging sustainability for businesses?
- Energy efficiency – cloud service providers invest heavily in data center infrastructure and technology to maximize energy efficiency. They use advanced cooling systems, energy-efficient hardware, and optimized datacenter layouts to reduce energy consumption. This results in lower carbon emissions compared to traditional on-premises datacenters. Additionally, some cloud service providers, such as Google Cloud, match their energy consumption with 100% renewable energy (not just carbon credits, but real power), driven by investments in wind and solar projects
- Server virtualization – cloud providers employ server virtualization techniques, allowing multiple virtual servers to run on a single physical server. This consolidation reduces the overall number of servers needed, leading to lower power consumption and reduced electronic waste
- Scalability – cloud services are designed to scale resources up or down based on demand. This elasticity enables efficient resource utilization. When workloads are light, fewer servers are active, saving energy. Conversely, during peak demand, additional resources can be provisioned temporarily
- Location optimization – cloud providers often have data centers strategically located to take advantage of renewable energy sources. They may choose areas with abundant access to wind, solar, or hydroelectric power, allowing them to utilize cleaner energy for their operations
- Reduced hardware manufacturing – cloud computing reduces the need for individuals and organizations to purchase and maintain their own hardware. This results in fewer electronic devices being manufactured, reducing the environmental impact associated with resource extraction and manufacturing processes
- Data Center PUE (Power Usage Effectiveness) – cloud providers focus on improving the PUE of their data centers. PUE measures the ratio of total energy used by a data center to the energy consumed by IT equipment. Lower PUE values indicate greater energy efficiency
- Server utilization – cloud providers optimize server utilization rates, ensuring that servers are used efficiently. This minimizes the “zombie server” problem, where underutilized servers continue to run, consuming energy unnecessarily
- Energy-saving features – cloud services often provide energy-saving features like automatic server power management, load balancing, and dynamic resource allocation to reduce power consumption during periods of low demand
- Reduced commute and travel – cloud computing enables remote work and collaboration, reducing the need for employees to commute to physical offices. This cuts down on transportation-related carbon emissions
While cloud computing offers many environmental benefits, it’s essential to note that its overall impact can vary depending on factors such as the energy mix used by the cloud provider, the efficiency of datacenter operations, and the sustainability practices they employ. Therefore, organizations should carefully consider the environmental credentials of their chosen cloud providers and actively manage their cloud resources to minimize their carbon footprint.
Making payments greener in the cloud
Although payments do not represent a core activity for most companies, they are a key business function, and an area that should not be overlooked when it comes to its sustainability and environmental impact. According to the 12th UN Global Compact-Accenture CEO Study — the world’s largest research initiative on sustainable leadership — an overwhelming 98% of executives now agree that sustainability is core to their role.
So, for businesses looking to make their payment options greener than a US dollar bill, what are the current payment options out there being used by consumers, and how are they impacting the environment?
- Digital wallets and mobile payment apps – Apple Pay, Google Pay, and Samsung Pay: These digital wallet services encourage paperless transactions and reduce the need for physical payment cards
- Green banks and credit unions – look for banks and credit unions that have committed to sustainability initiatives, such as investing in renewable energy projects, reducing their own carbon emissions, and supporting eco-friendly initiatives in their communities
- Online payment platforms – PayPal has set sustainability goals and is actively working to reduce its environmental impact through initiatives like renewable energy sourcing and responsible datacenter practices
- Cryptocurrency – although largely leaving a heavy carbon footprint in the payments world, some cryptocurrencies, such as Ethereum, are exploring energy-efficient consensus mechanisms (e.g. Ethereum’s transition to proof of stake) to reduce their energy consumption
- Green credit cards – some credit card companies offer cards that donate a portion of a consumer’s spending to environmental causes or provide rewards for eco-friendly purchases
- Carbon offsetting options – some payment providers allow users to contribute to carbon offset projects when making transactions. This can help counterbalance the carbon footprint of a consumer’s purchases
- Local and ethical banking options – consider local banks and credit unions that prioritize community and environmental concerns. They often have a more vested interest in supporting sustainable local initiatives
- Eco-friendly e-commerce platforms – when setting up online stores or choosing payment providers for e-commerce, opt for platforms that are committed to sustainable practices in their operations, datacenters, and supply chains
- Open banking and APIs – explore open banking platforms and APIs that allow for more transparency and control over your financial data, enabling you to make eco-conscious choices in your financial transactions
- Donation-based payment providers – platforms like JustGiving allow users to make payments that directly support charitable and environmental causes, businesses can even now leverage their PSP to support any certified charity, and combine this in the same flow of funds to reduce costs and produce digital documents needed for filing taxes
- Peer-to-Peer (P2P) payment apps – P2P payment apps like Venmo and Cash App can be used for splitting costs related to shared eco-friendly activities, such as carpooling or buying sustainable products
When evaluating payment options and providers for their environmental impact, consider factors such as the company’s commitment to sustainability, transparency in reporting their environmental efforts, and any specific initiatives they have in place to reduce their carbon footprint. Additionally, individual choices, such as opting for paperless statements and receipts, can further enhance the environmental friendliness of your payment practices.
Businesses operating in multiple geographies, with multiple currencies, multiple preferred payment methods, and with multiple regulatory and compliance requirements, are more than likely looking at adopting payment orchestration to enable them to scale at speed without technical debt.
As part of a business’ RFI process, they should be looking at the sustainability of each player in the supply chain – including payments. For example, Gr4vy is currently the only cloud-native payment orchestration platform and runs on cloud providers such as Google Cloud. In this specific case, Google has made the goal to power all of Alphabet, from datacenters to storage, offices, and other facilities with carbon-free energy by 2030, meaning any company that partners with a Google Cloud-run platform can immediately transform its IT carbon footprint on integration.
Interested in learning more about payment orchestration and the power of the cloud? Download our eGuide, ‘IaaS vs. SaaS: An e-commerce merchant’s guide to payment orchestration’, to discover which platform is best for your needs – including building a payment orchestration layer in-house.
Gr4vy, trusted by Woolworths Group, Setplex, Mythical Games, Ding, and more, is a powerful payments platform that allows you to deploy, manage, customize and optimize all your payments through one simple, universal integration. With a unique single-tenant, cloud-based infrastructure, Gr4vy makes scaling your business faster than ever.
Gr4vy is the only cloud-native and 100% payment service provider agnostic payment orchestration platform. Gr4vy gives every merchant full control over the bespoke resilience, redundancy, and performance expected from a cloud service that integrates into their payment stack. To find out more about Gr4vy, get in touch with our team, or explore our platform.