A recent Deloitte report commissioned by Google Cloud Australia & New Zealand, entitled ‘Clean cloud: meeting the climate challenge in Australia & New Zealand’, found that 34% of businesses still don’t have a climate strategy, and of those that do, 60% have not seen significant reductions in emissions levels.
Achieving meaningful reduction in carbon emissions from energy is therefore at risk unless more Australian businesses develop climate strategies and use technologies to achieve them.
The report found that increased use of cloud and related technologies can help Australian industry reduce carbon emissions from energy use to help achieve the 28% reduction target by 2030. For example, shifting data and applications to the cloud from on-premises means servers could deliver a reduction in emissions of 4.5 million tonnes directly. However, the report noted 12 cloud-based applications that could provide the biggest dividend.
Some of the 12 use-cases – like monitoring inventory in real time to minimise wastage, or installing cloud-enabled AI systems to heat and cool buildings in response to current weather conditions – can be considered by businesses across all sectors; while others present more industry-specific opportunities – like drone-enabled crop monitoring to support agriculture productivity, or incorporating climate risk into financial asset pricing.
Australia’s National Greenhouse Gas Inventory showed that while the business-share of emissions fell by 9.9 million tonnes between 2005 to 2019, it will need to fall a further 43 million tonnes by 2030 to achieve a 28% reduction.
The report, informed by a survey of nearly 500 businesses across Australia and New Zealand operating in a range of industries, also found that only 7% of Australian businesses have fully transitioned to cloud, while 97% of businesses that do use cloud technology report positive environmental impacts.
Deloitte partner and report author, John O’Mahony, said: “There is a AU$680 billion economic opportunity for Australia from investing in a coordinated climate transition, and those that embrace innovative solutions will be the ones that benefit.
“Businesses are increasingly focusing on their environmental impacts and should be considering every possible opportunity to help achieve their emissions reduction objectives and this includes ‘indirect’ opportunities such as cloud technologies for data storage and access.
“Yet we’ve found that these are currently very under-utilised. This suggests that businesses don’t view the cloud as a means to reduce emissions or, at the very least, they don’t understand the opportunity. Only one-in-five see ‘improving sustainability’ as a key benefit of adopting cloud systems, with decisions to adopt cloud generally undertaken on the basis of a narrower, commercial assessment only.
“Ultimately, we’ve found that businesses with a climate strategy that use cloud are the most likely to be realising emissions reductions.”
To support businesses to further their environmental progress through cloud, the report proposes they:
- Build capability through communities of practice;
- Coordinate technology and sustainability teams;
- Quantify the environmental benefits of technology investment decisions; and
- Ensure technology spending is guided by a coherent, overarching climate strategy.
Alister Dias, VP, Australia & New Zealand, Google Cloud, added: “Google Cloud is proud to operate the cleanest cloud in the industry to help customers transform their business in a sustainable way. Cloud is significantly more energy-efficient than on-premises datacentres, and this research shows there is a real opportunity for businesses to better understand impact of cloud technologies and reframe them with a much wider lens, as drivers of improved, and hopefully ambitious, environmental performance objectives.
“This report has the information that sustainability leaders need to make progress toward their emissions targets using cloud applications, and provides technology leaders with an additional environmental dividend to their cloud transformation business cases.”