Mandatory data centre sustainability reporting is here
Operators must act now or risk falling foul of new legislation, says Colm Shorten, Global Strategy & innovation at JLL.
Time is up on self-regulated reporting and the transition to legislation-led reporting is here. The EU’s new Corporate Sustainability Reporting Directive (CSRD) makes businesses more publicly accountable by obliging them to regularly disclose information on their societal and environmental impact. There is a clear shift from a self-regulated initiative (SRI) approach to a mandatory legislative approach and before the year is out, we will see no less than four separate pieces of legislation in play which directly apply to Data Centres.
The deadline is rapidly approaching. To meet the requirements of these various legislative changes, data centres must collect reporting data from January 1st, 2024. Exactly what that data is depends on the materiality assessment of the individual company, combined with an assessment of wider business activities and commitments.
For those who are unclear on the how, the who, and the what of their materiality assessment under EU taxonomy and the Corporate Sustainability Reporting Directive, the time to act is now.
Let’s take a step back and consider what we mean by sustainability. Sustainability fundamentally means meeting the needs of today without negatively impacting the future.
In the context of the data centre industry the definition of sustainability rarely changes. As an industry we seek productive harmony and are beginning to get some true momentum behind the ‘how’ of data centre sustainability.
Across the globe we have seen two key terms widely adopted: “Climate Neutral” and “Net Zero”. These terms can help break down and break out the contributing factors and assist with identifying, measuring, and controlling them.
Becoming familiar with the varied definitions & terminology and ensuring it is enshrined in your company culture is the single most effective way of making educated commitments and helps build an effective pathway to achieve them.
Unless you define what sustainability means for you, it will not be possible to achieve; and while the legislation is drive and the guide, net zero or climate neutral is the goal.
Easier said than done
What is confirmed as of today is simple to state, but hard to implement:
- Mandatory ESG disclosures are to be made within your Company Report
- The start for data collection is January 1st 2024 for the next tranche of businesses
- Double-materiality reporting means the view is now inside out, and outside in
- Evidence based reporting means you have to prove any claims you may make
- Independent assurance of your data against international standards/science-based targets is compulsory
Becoming CSRD-ready is not a simple task. It requires assessment and analysis of business activities and systems, data collection and validation, robust polices, actions and targets and a set of fully trained staff to complete the work. It is time-hungry and complex and is likely to require significant financial support.
Organizations must now ensure they understand what the new legislation requires and the implications for their business. They must map where they are aligned, be confident in proving their claims, identify any gaps and be ready to act.
For organisations where this is not the case, we strongly advise partnering with an expert, who can help guide you through the audit process and create a roadmap for data collection. Being prepared is key to avoid future likely penalties.
Getting ahead globally
Data centres & the ICT sector should be part of the climate solution and not part of the problem. The starter pistol has been fired and while the main changes in legislation affect the EU, history has taught us that EU directives and mandates are commonly adopted globally, if at a slightly slower pace.
Everything here can and should be applied to AMER or APAC, with the upshot being greater sustainability for the facility and an improved ability to report on it when the requirement becomes mandatory.
For more information read Colm Shorten’s Countdown to Net-Zero paper or for more advice on how to comply with the new EU Corporate Sustainability Reporting Directive, please get in touch today: email@example.com or firstname.lastname@example.org