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Exploring carbon neutral and NEXTneutral with Craig Scroggie, CEO NEXTDC [with video]

Information technology is responsible for as many carbon emissions as air travel. Data centres, which house IT infrastructure, are growing at an exponential rate globally, and it is predicted that over the next five years, as much as 20% of all electricity generated will be consumed by the ICT sector.

Australia’s leading data centre provider NEXTDC is tackling this problem head-on: They have been carbon-neutral since 2018 and now offer an industry-leading carbon-neutral service to their customers. I recently had the pleasure to speak with Craig Scroggie, CEO of NEXTDC, about their journey to net-zero.

Craig is a visionary leader who is never satisfied with the status quo and is always on the lookout for performance improvements for his customers, and emissions reductions in NEXTDC’s business. In this article, I’ll share how NEXTDC achieved carbon neutrality, how they are helping their customers achieve their own sustainability goals, and Craig’s three key takeaway messages for other organisations looking to achieve net-zero emissions.

Data centres are power-hungry

Every time you watch a movie on Netflix, make a Zoom or Teams call, search for something on the Internet, post on LinkedIn, watch a funny cat video, or order online, data centres are working away in the background, processing, storing and disseminating the data and applications that enable our modern lifestyle.

In our interview, Craig notes that forecasts from Gartner, IDC and others indicate that every 18 to 24 months, the total amount of information worldwide doubles! It follows then that the amount of information that data centres need to store, back up, protect and share is also doubling.

ICT equipment needs power – and a lot of it. But it’s not just the equipment itself, there is also the power required to cool data centres. Even with advances in digital technology, ICT equipment still generates a lot of heat, which needs to be efficiently removed to ensure the data centre functions optimally.

When you add electricity use from air conditioning to the electricity consumption by the computer equipment itself, you can picture just how much energy is needed. Craig said that the power consumed by data centres globally is between 2% and 3% of all electricity use  and that over the next five years, it is forecast that data centres will consume as much as 20% of all electricity generated.

How NEXTDC achieved carbon neutrality

NEXTDC is dedicated to continuously improving the benchmarks in the industry for data centre operational and sustainability excellence. For Craig, sustainability improvements start at the supply chain, the design, construction and development of data centres, and go all the way through to day-to-day operations.

NEXTDC is making use of the environment rather than use power to drive high-cost cooling and carefully manages airflow to reduce the amount of energy that is required to drive mechanical cooling systems.

They pioneered renewable energy production in the Australian data centre industry with M1 Melbourne’s $1.2 million photovoltaic system, installed eight years ago in 2013. NEXTDC is continuing its rollout of solar on data centre roofs as well as on adjacent buildings. They are also investing in power purchasing agreements, where they act collaboratively with other buyers to fund the development of wind farms and other generation technologies to power their facilities.

NEXTDC also places a high value on water efficiency and recycling of water, as well as recycling the company’s and their customer’s waste materials. As a testament to their operational efficiencies, NEXTDC’s SI Sydney and M1 Melbourne data centres have both been certified as NABERS 5-star rated data centre infrastructure facilities for energy efficiency.

To take responsibility for all relevant greenhouse gas emissions, NEXTDC decided to go carbon neutral, and has been a certified Climate Active organisation since November 2018.

Extending NEXTDC’s carbon neutrality to their customers

The next step in NEXTDC’s sustainability journey was to allow their customers to come together around a shared commitment to sustainability leadership and create a more sustainable future. NEXTDC created a service called NEXTneutral, which enables customers and partners to leverage the carbon offset capability NEXTDC has built for their own corporate program.

It is difficult for data centre customers to know how many carbon emissions are generated by data centre operation that relates to their business. Under NEXTneutral, the carbon emissions produced in a standard data centre rack are pre-calculated. NEXTDC takes care of the procurement of carbon offsets on their customers behalf, which helps their customers quickly and easily neutralise carbon emissions attributable to their portion of data centre electricity use. The carbon offsets fund important ecological projects, which in turn creates real change for the environment and for society.

It’s as easy as choosing to fly carbon neutral – NEXTDC customers can opt-in by going to their service management portal and clicking the NEXTneutral button, which allows them to offset their data centre emissions quickly and efficiently.

How NEXTDC manages physical climate change risks

In the interview, I asked Craig how physical climate risks are affecting NEXTDC. Craig mentioned that physical climate risks such as flooding, bushfires, earthquakes and cyclones are front of mind for data centres, alongside other physical risks that could cause outages and disruptions. He says that when you think about protecting customers infrastructure and building business continuity and resilience into operations, the first action is ensuring that the data centre is always on and always available.

With this in mind, NEXTDC has certified to the highest standard in the world. The Uptime Institute, an independent thought leader and certification body in IT and data centres, awarded NEXTDC the ultimate recognition of the overall design excellence of NEXTDC’s facilities. NEXTDC started with Tier III certification, then moved to Tier IV Certification for Fault Tolerance, which is the highest standard in the world.

Craig Scroggie’s three tips for other organisations moving to net-zero

The opportunity to be the platform of choice for the digital era comes with the responsibility to be stewards of a sustainable future. I asked Craig what advice he would give other organisations moving down the net-zero path. He provided these three takeaway messages:

1 – Just start

Craig says to just start and do something. It doesn’t matter where you start, but when you think about your operations, the sustainability of what you do, and looking for partners that can assist you, you don’t have to spend the next three years thinking about all elements of a sustainability strategy. Start somewhere, look at the areas in your supply chain that you can have the most influence over and choose something to make a difference on.

2 – Get help

The second key takeaway message from Craig is that there are a lot of people out there that would love to help. So if you’re looking to achieve Climate Active certification, you can talk to the relevant stakeholders and the Climate Active government department. If you need assistance with energy efficiency, benchmarking, and certification, talk to the NABERS team. You can speak with independent providers who measure energy efficiency and help you build strategies to reduce the amount of power you consume.

And if you’re a customer who builds IT infrastructure, or a cloud service provider or an enterprise, you can talk to a company like NEXTDC to help you opt into programs that allow you to offset the carbon footprint of your data centre and to also reduce your energy footprint. There are many people that want to make a difference in this area, so reach out to someone and start having a conversation on what action you can take that will make a difference.

3 – Never stop

Don’t try and solve the sustainability challenge all in one go. NEXTDC started out with small strategies, such as wanting to have renewable energy as an input to their business, and over time, they got better at managing airflow and reducing their PUE. Craig says that you need to look at the challenge with a long-term view. Being more sustainable is not something that is ever finished; it will always be a work in progress. Every day, every month, every year, you learn something new, and you continue to build that into your long-range plans.

For NEXTDC, every new sustainability achievement will put them a step closer to their long-range plan of getting to 100% renewable energy and to the long-term goal of 100% of their customer base opting into offsetting their carbon footprint as well.

About NEXTDC Limited

NEXTDC is Australia’s leading data centre-as-a-service company and one of Australia’s fastest-growing technology organisations. NEXTDC data centres and custom co-location solutions are engineered to grow in line with the demands of a business and promote flexibility through solutions that scale, supported by the country’s most dynamic and highly skilled ecosystem of partners, carriers and cloud platforms.

About 100% Renewables

100% Renewables are experts in helping organisations develop their net-zero and carbon-neutral pathways. If you need help with developing your climate action plan, please contact  Barbara or Patrick.

If you are an organisation leading in climate action and would like to get interviewed in our Driving Net Profit With Zero Emissions show, please get in touch with Barbara.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.

Best practice examples and insights for communicating your net zero journey with SEFIANI [with video]

There has been an increasing focus on ‘net-zero’ in the past few months, so from a communications perspective, it is difficult to differentiate your net-zero journey from everyone else’s. As more companies embark on their climate action journey, the challenge many face is whether to talk about it and how and when to meaningfully engage with stakeholders.

I recently had the pleasure to interview Robyn Sefiani, CEO & Reputation Counsel of Sefiani for the second episode of my “Driving Net Profit with Zero Emissions show, see video below. This blog post summarises our major discussion points.

Communicating your climate action efforts is important

In the past, there was no social media to connect and inform people, and importantly to galvanise action. A large proportion of the population was not engaged. Today, people are better informed and are demanding action.

Investors are also putting companies under increased scrutiny to disclose their climate risks and responses, for example through the Task Force on Climate-Related Financial Disclosures (TCFD) and the CDP.

The power of consumers and shareholders is pushing organisations to a more responsible position, including towards the need to reach net-zero emissions. Companies cannot afford to sit on the sidelines, which could result in damaged reputation, risk to operations, missed market opportunities, boycotts and a weaker talent pool.

However, many companies are announcing net-zero targets without a plan. They announce a timebound ambition to be net-zero without a roadmap, interim milestones or any clarity on how net-zero will be achieved and communicated to their stakeholders. Some companies are also reticent to communicate proactively, perhaps because they’ve been criticised in the past.

Saying nothing is no longer acceptable.

Changing consumerism and social licence to operate

According to a CapGemini study from 2020, 79% of consumers are willing to change their purchase preferences based on social responsibility, inclusiveness and environmental impact.

Taking this a step further, a study by Insites Consulting showed that 25% of Australians had boycotted a brand for sustainability reasons, compared to 14% just over twelve months ago. This behaviour is skewed towards younger generations, with 41% of Millennials reporting boycotting behaviour compared to just 6% of Baby Boomers.

Nowadays, people are genuinely looking at actions versus promises on sustainability and climate. People are watching to see if companies are doing what they said they would do. There are also plenty of activist groups with far-reaching influence that will call companies out when they fall short of their promises.

At the same time, people are also looking to support companies or brands that are doing the right thing. There is a huge opportunity for companies that are progressing with their net zero plans to meaningfully engage their audiences and galvanise support for their sustainability journey.

No room for greenwashing

Audiences today are too savvy to be fooled by greenwashing. Companies are facing intense scrutiny for taking shortcuts or failing to communicate with honesty, integrity and authenticity.

Brookfield Asset Management’s Mark Carney, a key climate finance leader and vice-chair at Brookfield, ‘walked back’ his remarks after claiming pollution had been neutralised across its portfolio. This is a company with an enormous renewables business, but it remains active in fossil fuels. The position of the company was that the renewables business compensated for the company’s other activities, but the Science Based Targets initiative (SBTi) does not count avoided emissions in its framework, which means the firm can’t use avoided emissions to meet net-zero claims without addressing its other operations.

In another example reported by Bloomberg, Rio Tinto, announced a 15% target reduction in operational emissions by 2030, which it claimed aligned with a 1.5° C pathway. However, climate activist group, Market Forces, disagreed with their calculations and said that alignment would require a 50% reduction in emissions over the same timeframe. Rio Tinto has now agreed to be more transparent with its targets and performance and will disclose short, medium and long-term targets for greenhouse gas emissions in its own operations.

One final example, was BMO, a Canadian Bank, that came under fire for its net-zero pledge, which was dismissed as “unambitious”. Adam Scott, director of Shift Action for Pension Wealth & Planet Health found that “a bank that is claiming climate leadership while financing fossil fuel pipelines is either greenwashing or doesn’t understand the urgent action the climate crisis necessitates.”

For many companies, aligning to the Paris Agreement requires learnings, risks and operating in new ways, and not everyone is going to get it right. Instead of misleading stakeholders, acknowledging a failure can help a brand to build social capital. This was the case for Charity Water, a non-profit organisation that disclosed that one of its water drilling projects had failed after one year. The head of Charity Water openly communicated the failed project, and came back with an action plan. When the team returned to drill a few months later, many more people had become invested in the story and were willing them on to succeed.

Best practice in communicating your climate action

As companies step up and transition to net zero, the question for many is what, when, where and how to communicate their journey.

With the rapid increase in public focus on transparency in corporate communications over the past five years, it is important to take a considered and strategic approach to communications across all stakeholder groups.

Our top 7 tips for companies to consider when communicating their net zero journey are:

  1. Regularly communicate proof of action: Frequent and consistent communication allows companies to build a voice on climate action and ultimately, that will help to build a bank of social capital.
  2. Differentiate yourself: Consider what your journey means for your company and your stakeholders, and how this is different from your competitors. As with any example of communications, no company will achieve cut-through if they cannot differentiate themselves.
  3. Be true to your brand: Demonstrate that sustainability is in line with your own brand positioning and not an add-on.
  4. Know your audiences: Different audiences have different expectations of engagement. A targeted multi-channel communications plan will allow you to engage with your audiences in a meaningful way and work towards establishing trust. Consider how you can empower your stakeholders – employees, shareholders, customers and partners – to take small actions that align with your commitment and come along with the company on its sustainability journey.
  5. Don’t discount employees: With the rise of ‘glass box’ company culture – a culture of transparency, prizing visibility of the company’s values, decisions and action – companies that have sustainability as part of their internal culture, will see it amplified through their employees.
  6. Be transparent: If you make a mistake or miss a milestone, take your audiences on your journey. Be honest, be human, and reiterate the goals of the journey.
  7. Keep it simple and inspiring: Audiences do not want the jargon or the doom and gloom. They want to know that you are taking action, through simple, clear and inspiring communications. A study by Greenbiz showed that videos positively depicting nature’s beauty and innovative climate change solutions were 50 times more effective at driving views than negative messaging or even a combination of positive and negative.

Communication plays a pivotal role in supporting a company’s net zero journey. There is a huge opportunity out there for companies and brands that can strategically use communications to bring their stakeholders on their journey with them.

About Sefiani Communications Group

Sefiani is a leading Australian strategic communications firm that helps companies enhance and protect brands and reputations Through a media relations, social and digital communications and stakeholder engagement, Sefiani solves complex business challenges and seizes opportunities for clients. The firm also works with clients to help them manage and share their sustainability journey in a way that is meaningful to their stakeholders, mitigates issues and builds brand reputation.

If you want to get in touch with Sefiani, please visit the following:

About 100% Renewables

100% Renewables are experts in helping organisations develop their climate action strategies and accompanying financing plans. If you need help with developing your climate action plan, please contact  Barbara or Patrick.

Feel free to use an excerpt of this blog on your own site, newsletter, blog, etc. Just send us a copy or link and include the following text at the end of the excerpt: “This content is reprinted from 100% Renewables Pty Ltd’s blog.