14 cloud services players scrutinized for green credentials

Akamai, Apple, eBay and Google stand alone among Internet services and social networking companies in their transparency about the greenhouse gas (GHG) emissions caused by their worldwide data centers, according to a new report published on the topic by independent market research firm Verdantix.

The report, Carbon Strategy Benchmark: Internet Sector, scrutinizes 14 of the largest players in cloud services including three Chinese companies (Alibaba, Baidu and Tencent) plus Akamai, Amazon, Apple, eBay, Expedia, Facebook, Google, Netflix, Priceline, Salesforce and Yahoo! The Verdantix report is similar to one that it published earlier this year looking at the internal operational and environmental sustainability practices maintained by 14 top services firms that offer corporate sustainability and green IT services externally to other companies.

According to the new Verdantix report, the lack of transparency isn't necessarily about the lack of data. It notes that Yahoo! and Google have been measuring their carbon footprints since 2006, before this sort of thing became a really popular public practice in the high-tech industry. Google chose to disclose its energy consumption on an ongoing basis just last week ("Google fesses up to cloud energy consumption"). That doesn't seem to be the problem.

Verdantix looks at a couple of different things in the report, in particular, whether or not the internet services companies in question made disclosures about their data center metrics as opposed to whether or not they make full-blown disclosures about carbon emissions across their entire operation. In the latter category, Akamai, Apple and eBay all report emissions for Scope 1, Scope 2 and selected Scope 3 sources. If you are not familiar with term, Scope 1 refers to direct emissions created by a company's employees and facilities, while Scope 2 and Scope 3 get into the indirect impact of a company's products and supply chain.

The report notes:

"Akamai, a content delivery network supplier, stands head and shoulders above its rivals for its carbon reporting standards. With carbon-conscious customers such as Apple, HP, IBM, Puma, Microsoft, SAP, and Siemens, Akamai appreciates the need to be on top of its own footprint."

Another positive development, which could wind up being a harbinger for the software as a services (SaaS) applications sector: CRM giant Salesforce submitted its information to the Carbon Disclosure Project for the first time in 2011. You can better other companies hoping to make an impact here will feel that they need to start doing the same.

One challenge that is acknowledged by Verdantix is that there is no common framework right now for reporting emissions associated with data centers. Among the companies that report, Apple and Yahoo! use the traditional financial methods of disclosing this information as part of their overall disclosures while Akamai and eBay focus on operational metrics. The other common theme is that none of the companies considered currently have their information verified by an independent third party (as opposed to a consultant hired for the purpose).

As the cloud services landscape becomes more competitive, it will become more imperative for companies like the 14 considered in the Verdantix report to subscribe to a higher level of transparency. Setting aside the fact that more businesses are interested in environmental sustainability, because not everyone buys into the need for this, the financial community will require to know more about the energy consumption and other energy-efficiency metrics that distinguish one cloud player from another.

One of the final comments in the Verdantix report is one of the most telling:

"There are many reasons why internet firms do not disclose their GHG emissions data. One of these reasons is the perceived negative impact on the brand because of the size and growth rate of the emissions. But a carbon management (and communications) plan tied to anticipated business strategy will obviate potential backlash from disclosures."

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