As the commercial real estate industry continues its in-depth conversation around the future of ESG and sustainability for the sector, those who develop and manage data centers face unique obstacles. With the rapid rise of cloud and edge computing, information management and big data, the energy consumption associated with activities conducted within data centers are of increasing global concern. Thus, professionals managing this type of asset must be forward-thinking in their approach to developing and maintaining efficient and resilient facilities which will be operable under increasingly strict ESG standards and stakeholder demands.
To discuss the complex pathway to sustainability for data center developments, BREEAM recently hosted a panel of industry experts who provided their expertise and insights on effective methods for responsible management of this asset class as its national construction pipeline continues to rapidly expand. Featured panelists included:
● Aaron Binkley, Digital Realty
● Chris Pennington, Iron Mountain
● Jennifer Ruch, Equinix
Throughout the conversation — which was moderated by BRE’s US Director of Operations Breana Wheeler — a number of key considerations for designing, developing and operating strong data center assets were brought to light.
1. The energy consumption associated with data centers may appear daunting, but it’s manageable — especially for those who are willing to educate themselves on clean energy options and opportunities for increased efficiency.
“The data center industry is the largest consumer of clean energy out there,” shared Chris Pennington. “Some of the really innovative new solutions that are making renewable energy more available to companies of all sizes and scales are in fact being driven by the conversations data center operators are having with their local providers or retail energy providers.”
“There are numerous instances and examples where data centers have gone into a market or expanded in a market and paired that growth with additional renewable capacity — either directly from a competitive market, from private developers, or from utilities supply,” added Aaron Binkley.
As moderator Breana Wheeler notes, this kind of activity demonstrates prime opportunities within the data center industry to enact ESG initiatives that are driven by a business rather than a regulatory perspective.
2. Embodied carbon is an important component in analyzing the way the data center industry tackles ESG and in the development of sustainable long-term solutions.
“With data centers, there’s a lot of power and cooling infrastructure that goes into these buildings. The initial focus is on the steel and concrete in the core and shell of the building — and then there’s a massive amount of electrical infrastructure and cooling infrastructure that goes in as you fit out the suites for individual customers to tenant the building,” said Binkley. “That equipment and that infrastructure also has a significant carbon footprint. [What sometimes is overlooked] is everything you do to fit out that data center.”
“Electrical infrastructure and building materials that go into our sites pose a big opportunity to engage our suppliers, and [at Equinix] we’ve hired a supply chain diversity and sustainability leader to really start those conversations,” noted Jennifer Ruch.
3. Investors, tenants, and facility owners & operators can benefit from acting as partners in their approaches to ESG, and an open conversation can drive stronger sustainable solutions for data centers.
“The investment community is rapidly scaling up their ESG efforts and continuing to grow their interest, but in many ways we’re still educating them on what the material issues are for data centers,” said Ruch. “Answering questions like: How do you buy renewable energy? Are we actually delivering electrons of green energy directly to the site, or how does the virtual power purchase agreement work? At the same time we’re also educating our equity research analysts and other key stakeholders on what we’re doing and how we as an industry are promoting sustainability leadership.”
“Our tenants are absolutely asking us questions about the energy efficiency of our facilities, the water consumption of our facilities, and the total carbon footprint per megawatt of our facilities,” Pennington shared, adding a perspective on how tenants are involved in the equation. “We are a big piece of their energy footprint and their energy supply chain, so absolutely these are qualifying questions for when they are selecting a co-location data center provider.”
If you missed the panel, you can watch the full webinar here.
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