Cloud computing raises new ethics, sustainability questions

[Editor's Note: GreenBiz contributor Eric Louie wrote last week about some of the current environmental benefits of cloud computing. In this article, originally published in the BSR Insight, BSR authors Dunstan Allison Hope and Ryan Schuchard discuss the tech trend's potential for even greater sustainability gains.]

Just a decade ago, it would have been hard for all but the most tech-savvy to imagine the extent of cloud computing today. The cloud -- what some are calling “the factory of the 21st century” -- is a complex system of data centers worldwide that store, process and deliver information on demand over the Internet, providing users with resources, applications and information that they previously would have stored locally. The cloud, run by a network of IT service companies, Internet firms and telecommunications services providers, offers services to all of us, from banks and retailers to individuals like you and me. It is both real -- requiring traditional inputs such as electricity -- and virtual.

Throughout the history of corporate responsibility, a few megatrends have redefined how we think about the ethics of business. The outsourcing of manufacturing to places with low labor costs and lax regulations, for instance, led to a rise in consciousness about working conditions at supplier facilities. Or the increasing number of people living at the “base of the pyramid” (the now 2.5 billion people who exist on less than $2.50 per day) prompted companies to address global poverty while advancing business interests.

We believe cloud computing has the potential to create new sustainability and ethical dilemmas. Addressing these dilemmas calls for a rethink on how we approach corporate responsibility.

To be clear, cloud services make a positive contribution to sustainability: The cloud encourages important clean-tech applications like smart grids and it also encourages consumers to use virtual services such as video streaming to replace resource-heavy physical products. The cloud also draws resources to where they are used most efficiently and its jobs tend to be cleaner and safer than those of more traditional industries.

What follows is an evaluation of how cloud computing could affect two of the most pertinent sustainability issues of our time: climate change and human rights.

The Climate in the Cloud

At the 2011 BSR Conference, Autodesk CEO Carl Bass posed a question about the power of what he called “infinite computing,” asking what we can do to harness the unlimited amount of computing to help solve some of today’s most pressing problems.

There is no doubt that the expansive power of computing can help us address sustainability challenges, but this technology also draws from the Earth’s finite environmental stocks and biosphere. Data centers are already responsible for nearly 1.5 percent of global electricity use -- a level that has steadily climbed despite the recent economic slowdown -- and there are troubling signs that data center power use will continue to grow substantially.

There are several interconnected issues related to the cloud’s impact on climate change: its swelling energy footprint, the fact that location makes all the difference on the carbon footprint, the cloak of secrecy around data center sites and the challenge of accounting for carbon when collaboration is so complex.

Regarding the first issue, there have been breakthroughs in energy efficiency at data centers, such as chiller-less servers and pods that use low energy in harsh climates, and there will be more. But as affluent consumers desire more high-tech equipment and applications grow hungrier for energy, global energy consumption will rise by around 40 percent by 2030, likely causing energy demand from data centers to outstrip efficiency gains.

Facility location is another challenge: If all else is equal, data center operators will build facilities where the energy is cheap, and usually, that means dirty. In the United States, more than half of all top data centers rely on coal for the majority of their energy needs, which means a lot of the new data centers are clustered in North Carolina and the Midwest.

Meanwhile, there is a tendency for operators to keep quiet about where their sites are located, which runs against the good practice of making carbon information transparent. Many companies keep certain site locations, such as suppliers, under wraps for competitive reasons, and cloud companies are even more secretive about data center locations due to often legitimate concerns about security. Customers whose personal information is stored at these data centers tend to appreciate this. Nevertheless, transparency about local carbon impacts remains a key element of climate responsibility, and companies will be under increasing pressure to disclose more and, when they can’t disclose, to explain why.

Finally, the cloud’s value chain is more complex than what current accounting and reporting systems can handle. Even the new Greenhouse Gas Protocol’s Scope 3 standard, the authoritative framework for measuring carbon in value chains, offers little guidance. The difficulty lies in the fact that the disparate collection of IT services companies, Internet firms, telecommunications and service providers make it hard to create accountability for carbon performance as a system. 

Next page: Challenges ahead