SAP aims to be a net-zero enterprise by 2030. To achieve this, SAP needs to move the majority of customers to the cloud in order to reduce overall emissions and have better emissions management capabilities. RISE with SAP and GROW with SAP, two flagship solutions designed to help our customers migrate to cloud enterprise resource planning (ERP), are essential elements in SAP’s net-zero journey.
SAP is now the second-fastest growing cloud company, having successfully moved thousands of customers to the cloud over the past several years as part of the company’s strategic transformation.
“Our customers want flexibility, reliability, and security from SAP, but they also want sustainability,” said Scott Russell, member of the Executive Board of SAP SE, Customer Success. “Our RISE with SAP and GROW with SAP solutions help customers move to cloud data centers, which play a significant role in helping them achieve their net-zero targets and deliver more sustainable practices throughout their business processes.”
SAP and other cloud providers are increasingly investing in building and operating green data centers. Green data centers prioritize sustainability, aiming to minimize environmental impact and carbon footprints. To minimize the negative environmental impact, SAP-owned data centers run with 100% renewable electricity. The company achieves a “green cloud” by investing in high-quality, EKO energy-certified energy attribute certificates (EACs) to support renewable energy generation. These facilities incorporate energy-efficient design principles, use renewable energy sources, and employ eco-friendly cooling methods.
Moving SAP’s data centers to more energy efficient cloud computing is a key part of our own carbon emissions management. SAP’s net-zero commitment goes far beyond SAP’s internal data center usage. SAP aims to reduce or ensure renewable electricity for all cloud computing usage by customers, including partner hyperscaler data centers running SAP solutions. Even when RISE with SAP and GROW with SAP customers opt to use hyperscalers, the partner data center’s emissions relating to SAP customer usage is accounted for in SAP’s own scope 3 emissions reporting.
Cloud computing, whether in an SAP data center or a partner hyperscaler data center, offers several sustainability advantages over traditional on-premise computing. There are many ways cloud computing contributes to net-zero strategies:
Energy Efficiency
Cloud service providers operate large-scale data centers that are optimized for energy efficiency. These data centers are designed with advanced cooling systems, efficient hardware, and virtualization techniques, which reduce energy consumption compared to individual, on-premise servers. Cloud providers can achieve economies of scale and consolidate computing resources, leading to more efficient energy usage.
Resource Utilization and Scalability
On-premise computing often results in underutilized servers, as organizations typically focus their infrastructure to handle peak workloads. This leads to a significant amount of idle computing capacity during periods of low demand. Cloud computing allows organizations to dynamically scale their computing resources based on demand. Instead of overprovisioning on-premise infrastructure to accommodate future growth, businesses can easily scale up or down in the cloud. This scalability feature eliminates the need for excessive hardware purchases and allows efficient resource allocation, minimizing the environmental impact.
Shared Infrastructure
Cloud computing allows multiple users to share the same infrastructure, reducing the overall number of physical servers required. This shared model optimizes resource utilization, decreases hardware manufacturing demands, and lowers energy consumption and electronic waste generation.
Data Center Location
Some cloud providers strategically select data center locations based on factors such as access to renewable energy, cooling efficiency, and local climate conditions. They aim to place data centers in regions with lower electricity costs and higher availability of renewable energy, optimizing their operations for energy efficiency.
Direct Renewable Energy Purchases
Hyperscalers are increasingly signing long-term power purchase agreements (PPAs) with renewable energy providers. These agreements ensure a stable and predictable supply of renewable energy at competitive prices. By directly purchasing renewable energy, companies can reduce their reliance on fossil fuels and support the growth of renewable energy projects. They often invest in wind, solar, and hydroelectric power plants.
On-Site Renewable Energy Generation
Some cloud providers are building renewable energy infrastructure on-site. They construct solar arrays, wind farms, or other renewable energy facilities near their data centers to generate electricity. These on-site renewable energy projects enable the companies to have greater control over their energy supply and reduce transmission losses associated with transporting energy from remote locations.
Energy Attribute Certificates and Carbon Offsets
Cloud providers may purchase energy attribute certificates or carbon offsets. EACs represent the environmental attributes of renewable energy generation and can be bought to match the company’s electricity consumption. Carbon offsets, on the other hand, allow companies to invest in projects that reduce or remove greenhouse gas emissions to compensate for their own carbon footprint.
Grid Integration and Renewable Energy Contracts
Some cloud providers collaborate with local power grids and governments to support the development of renewable energy infrastructure. They enter into contracts that incentivize the grid operators to increase the share of renewable energy in their overall energy mix. This collaboration promotes the growth of renewable energy in the local region and enables the hyperscalers to access cleaner energy sources.
Innovation and Research
Cloud providers invest in research and development initiatives to explore new technologies and methods for renewable energy integration. They actively participate in collaborations and partnerships with academia, government agencies, and other industry players to drive innovation in renewable energy storage, management, and utilization. These efforts aim to accelerate the adoption of renewable energy and overcome the challenges associated with its scalability.
Collaboration and Remote Work
Cloud computing facilitates remote collaboration and remote work, reducing the need for employees to commute as frequently to physical offices. This leads to a decrease in carbon emissions associated with transportation.
Large cloud computing companies are reducing their carbon footprints and contributing to net-zero programs around the world. RISE with SAP and GROW with SAP have strong momentum in helping move SAP customers to the cloud and helping both SAP and customers achieve ambitious climate action goals.
Michael McComb is global head of Sustainability Communications at SAP.