Hyperscale cloud tech can help NZ speed up climate change action.
New Zealand is on track to fail to meet its 2050 net zero carbon commitment and pledge to halve greenhouse gas emissions by 2030 - and businesses need to close the gap between good intentions and action to achieve them.
That's demonstrated by new Microsoft research which shows there's a definitive gap between our intentions and our actions that must be resolved. In our new Accelerating the Journey to Net Zero research, led by Dr Chris Brauer of Goldsmiths University, 76 per cent of Kiwi businesses surveyed reported plans to be carbon neutral by 2050.
However, around a third (32 per cent) of organisations with 20 or more employees said they would miss the target. And that doesn't take into account small businesses, which make up around 97 per cent of New Zealand's business environment. If larger organisations, who are better resourced, are struggling, what will that mean for the majority of small businesses?
The challenge ahead is underscored by the fact that New Zealand's net emissions have risen 60 per cent since 1990, faster than any other developed nation except Turkey. Per head of population, New Zealanders are currently emitting three times their "fair share" of global emissions.
New Zealand's net zero carbon commitment and pledge to halve greenhouse gas emissions by 2030 means we are one of the world's leaders in legislating for climate change. But we're simply better at developing strategies than operationalising them – and the report is clear on the reasons why.
We've been slow as a nation to implement monitoring technologies that enable organisations to accurately determine how much they're emitting, and where their emissions come from. As the saying goes, if you can't measure it, you can't manage it.
Just 12 per cent of organisations are currently mapping their emissions. By contrast, in the UK, where net emissions have fallen 40 per cent since 1990, nearly half of organisations are charting their progress.
Climate change has been called the defining issue of this generation or, as others have put it, "code red for humanity". It's an issue that will profoundly affect every society on the planet if we don't act meaningfully – and swiftly – to reduce our carbon emissions.
Many businesses are confused about how to measure their current emissions or track their progress, and others are concerned about getting the right skills or finance in place to see their sustainability strategies through. If we're serious about reaching net zero, we first need to understand where we're coming from. Better measurement and more innovation to improve businesses' use of digital technology, skills and funding are our clearest path to success.
Clearly, there's more work to do to educate local businesses on what tools are available to simplify the sustainability reporting process. For example, Total Utilities runs reporting as a service, which can drastically reduce the burden on businesses and employees. The Sustainable Business Network's Climate Action Toolbox is a basic carbon calculator that provides another easy way for small businesses to get going quickly.
Measurement is just the start. The business leaders and employees interviewed for the study also reported the following barriers to implementing sustainability policies: lack of the right in-house expertise, lack of a clear organisation-wide strategy, poor understanding of the costs of their sustainability plan and insufficient access to sustainable technologies and insufficient funding.
Actions to be taken
So, what can we do to address these issues? The report concludes we need to "start fast and think big", combining short-term actions for quick success with longer-term strategies. In the short term, the focus should be:
- Setting explicit quantitative commitments for carbon reduction and removal
- Building in-house expertise and gaining multi-stakeholder buy-in to close funding gaps
- Monitoring supply chains and using carbon measurement technology
- Factoring natural capital – things like biodiversity, water quality, and natural disasters – into corporate strategies
As a tech company, Microsoft is especially interested in how digital innovation can support decarbonisation. Many sustainability leaders are deploying automation, machine learning, digital twins and, of course, capturing emissions data to drive greener outcomes. All up, adoption of these and other services – typically platformed on the hyperscale cloud – offers the greatest opportunity for digital technologies to contribute to reducing carbon emissions.
Every business uses data, and that data must be stored and processed somewhere. Traditionally, that's been in power-hungry on-premises datacentres or with local hosting providers.
Due to its massive economies of scale, and state-of-the-art investment in engineering to optimise use of compute and storage resources, the hyperscale cloud model now provides organisations with a vastly better option.
In 2018, Microsoft published a report by WSP called The Carbon Benefits of Cloud Computing that showed moving IT infrastructures from traditional data centres to the cloud could reduce companies' ICT-related carbon emissions by 72-98 per cent, with energy efficiency gains ranging from 22–98 per cent.
These gains are achieved through a combination of improved efficiencies in IT operations, IT equipment, data centre infrastructure and use of renewable energy. With hyperscale cloud's imminent arrival in New Zealand, we have never had a better opportunity to transition New Zealand's unnecessarily carbon-heavy data infrastructure into a much more sustainable cloud model.
The onus is on large organisations to spearhead the use of technologies like sustainable cloud to achieve net zero targets – providing leadership and creating scale that benefits the wider business ecosystem.
It's critical they ensure net zero is embedded in corporate R&D and innovations, and commit to funding development of innovative net zero solutions, products and services.
Collaboration vital
For example, architecture and design firm Jasmax has established measurement frameworks to help others in the construction industry understand the impact of different building materials and methods on emissions, aiming at transforming the whole end-to-end construction process. This is exactly the kind of collaborative approach we need, with larger, well-resourced businesses investing in R&D to the benefit of others.
Above all, we need greater collaboration between government, businesses, academics and NGOs to solve collective challenges, including upskilling our workforce and financial innovation that accelerates the green transition. Our new report also suggests a government incentive to require the use of best-available technology for containing carbon emissions.
Ultimately, while technology is hugely important, achieving net zero carbon requires a change of culture and mindset.
The talk during Covid has been how do we return to normal – but normal was killing us. Taking the steps identified by the report will naturally require determination, investment and commitment right across organisations and the public sector.
The cost of not doing this is far greater than the cost of taking action – and the longer we delay, the greater that cost will be.