Cloud sustainability
Consider sustainability standards and metrics in your cloud optimization process. Balance economic and environmental benefits to ensure that cloud optimization decisions align with your organization's goals.
Determine cloud sustainability policies and guidelines
Align cloud sustainability strategies with other optimization goals and commitments.
Identify opportunities to improve cloud sustainability.
Communicate with cloud computing and engineering stakeholders to effectively assess sustainability.
Definition
Cloud sustainability is the practice of considering environmental impacts and broader sustainability goals when making decisions about cloud usage. Cloud sustainability guides engineers and product managers to balance environmental benefits with financial costs or gains when they design, optimize, and deploy workloads.
Many organizations have sustainability programs that focus on a broad range of environmental impacts beyond just cloud usage. The environmental impact of cloud usage varies greatly among organizations because of different sources of carbon emissions. Many regions around the world are creating regulations that require companies to report their environmental impact regularly, including direct and indirect carbon emissions. Therefore, carbon emissions from cloud usage must be transparent. This transparency is increasingly important for cost allocation, reporting, forecasting, and other critical IT functions.
FinOps teams should collaborate with sustainability programs within the organization through cross-functional collaboration. This helps incorporate sustainability information when understanding cloud costs and quantifying business value. Within this capability, FinOps teams should look for opportunities to optimize cloud costs in a way that supports the organization's sustainability goals. Similar to finding opportunities for workload optimization or rate optimization, improved cross-functional collaboration can potentially reduce the carbon footprint of cloud usage. FinOps teams and other roles can evaluate recommendations from various areas and select the option that delivers the greatest financial, environmental, or operational value to the organization.
Generally, recommendations for workload optimization are closely related to reducing carbon emissions. This is because it involves using only the necessary resources when they are needed, such as turning off lights when you leave a room or using the right tool for a task. However, cloud sustainability efforts can conflict with cost savings from rate optimization. Reserved discounts can create barriers to optimizing or reducing certain resources.
Some architectural or operational decisions might conflict with sustainability goals. For example, creating multiple data or resource replicas to improve availability, or deploying services in closer but less energy-efficient locations to reduce latency. In some locations, cloud services may be cheaper but have higher carbon emissions. In other locations, they may be more expensive but have lower carbon emissions. This can lead to conflicting decisions when choosing a deployment location.
As with all FinOps practices, team collaboration is critical to determine an organization's priorities. These priorities dictate how the organization weighs trade-offs and makes decisions. An organization must consider cloud sustainability in the context of its business needs. In addition to balancing cost, speed, and quality, the cost of sustainability must also be considered.
Cloud sustainability is a capability in the optimizing cloud costs realm. However, cloud sustainability data is also used in many other capabilities. For example, it can be imported during data ingestion, allocated during cost allocation, and summarized in reporting and analytics. It can also be used in unit economics metrics or when benchmarking the emission costs of engineering teams.
The cloud sustainability capability measures environmental impact using carbon and carbon equivalents. However, FinOps practitioners should also consider all measurable and available environmental impact data, such as carbon dioxide equivalents, water usage, and waste generation.
Cloud sustainability considers the energy used for power and cooling in cloud servers and data centers. It also considers the efficiency of the workload architecture. To meet cloud sustainability goals, organizations must consider the embodied carbon of cloud services across their entire lifecycle. This includes carbon emissions from all stages, from the materials and energy used to build data centers to the disposal of legacy devices. Because cloud resources are consumed on-demand and are elastically scalable, reducing carbon emissions in a cloud environment is often easier than in a traditional data center. Therefore, cloud sustainability teams may be among the first asked to reduce emissions.
Sustainability data varies in scope, granularity, and quality among different cloud service providers and billing items. FinOps teams must work with sustainability teams to determine the required data granularity from cloud providers. They also need to determine the best way to adjust or normalize this data to meet company requirements. Concerns about the quality of cloud sustainability data may persist. Organizations should provide feedback to their cloud service providers or vendors about the data they need. However, the main goal of this capability is to use any available data to make recommendations about cloud sustainability. This is true even if the data is incomplete. If efforts focus only on data quality, the organization will miss the opportunity to make directionally correct, even if imperfect, recommendations. As a result, the organization would continue to make optimization decisions about structure, usage, and rates without this guidance.
Maturity assessment
Crawl
Key teams that use the cloud have a basic understanding of how cloud computing leads to greenhouse gas (GHG) emissions.
Cloud teams understand how optimizing cloud usage affects the carbon footprint.
The company may have regulations for reporting or reducing carbon emissions, but these regulations may not be consistently applied to cloud usage.
Teams have some carbon emission data, but it may not be well-integrated with other data.
Optimization measures focus mainly on elasticity and shutting down unused resources.
Conflicts between cost and carbon emissions are broadly evaluated and trade-offs are made on existing workloads.
Functional departments, such as procurement, finance, and business teams, have a basic understanding of how the cloud affects greenhouse gas emissions and their own roles.
Walk
All engineering teams and most other personnel involved in cloud usage are aware of their potential impact on corporate sustainability goals.
Cloud teams have various optimization mechanisms for emission reduction.
Carbon usage data is collected, reported, and shared with engineering and product teams at a finer granularity, but it may not be fully integrated with cost data.
Optimization measures shift toward redesigning or refactoring existing workloads.
Trade-offs between carbon usage and cost are more detailed and are sometimes considered before cloud migration and decision-making.
Run
The entire organization needs to understand the impact of IT and the role of the cloud on sustainability.
Sustainability is considered during cloud migration and optimization.
Data reports from cloud service providers are standardized, are highly granular, and are fully integrated with cost data for further analysis by various teams.
Workloads are designed with sustainability in mind. Teams use data to analyze deployment locations before workloads are moved to the cloud.
Functional activities
FinOps practitioner
Collaborate with sustainability personnel and team members.
Work with cloud providers and other data providers to request data improvements. Improve the granularity, quality, and auditability of Scope 1 (direct emissions from the company), Scope 2 (indirect emissions from purchased energy), and Scope 3 (all indirect emissions in the company's value chain) carbon emissions. Transform the data into a usable and accessible format to support sustainable business decisions.
Ensure that engineering and product teams understand how elasticity and efficient resource provisioning support sustainability goals.
Develop cloud sustainability optimization suggestions alongside workload and rate optimization suggestions.
Align cloud reports and metrics to show positive or negative sustainability impacts in addition to financial costs. This helps the organization achieve its sustainability goals.
Provide clear, relevant, and real-time sustainability data. Ensure the data is linked with other cost data to support more sustainable workload decisions.
Product
Collaborate with management, finance, and FinOps teams to understand business sustainability guidelines that may affect product strategy.
Collaborate with the engineering team to drive sustainability optimizations for assigned products as needed.
Finance
Work with engineering teams to clarify, balance, and justify more sustainable cloud computing choices, such as deploying in low-carbon regions rather than pursuing only the lowest cost.
Accurately and transparently disclose cloud usage in financial statements while maintaining integrity and complying with sustainability regulatory standards.
Procurement
Work with the FinOps team to incorporate cloud sustainability reports into company-wide sustainability reporting or data to inform vendor strategy decisions.
Work with the engineering department to balance business needs with sustainable architecture.
Provide suppliers with requirements for data or metrics to support cloud sustainability efforts.
Engineering
Strive to understand the strategic sustainability guidelines and priorities for the systems you are responsible for.
Consider the sustainability impact of resource decisions in addition to other financial costs. Adopt elastic solutions to minimize or eliminate resource waste.
Understand the sustainability impact of various cloud services to incorporate this understanding into the build process or identify optimization opportunities.
Management
Work with the FinOps team to understand how cloud usage affects the corporate sustainability strategy.
Develop strategies and priorities for decisions involving cloud sustainability optimization or other business drivers.
Set and review Objectives and Key Results (OKRs) or Key Performance Indicators (KPIs) for cloud sustainability to monitor performance changes.
Foster a culture of sustainability and increase support for prioritizing cloud sustainability activities.
Associated roles
Ensure that sustainability team members collaborate with the FinOps team to align on how cloud usage affects the corporate sustainability strategy.
Monitor changes in cloud sustainability performance over time.
Success metrics and KPIs
Sustainability reports are available for all cloud service providers, with all data standardized to the scope and granularity required for compliance reporting.
Sustainability reports are visible to all affected teams and are presented alongside cost data.
Sustainability goals, such as carbon budgets, are communicated to all teams so they can track their progress toward achieving them.
The impact on sustainability is considered during cloud migration and cloud optimization.
Establish clear guidelines for action when comparing optimization plans, especially when sustainability goals conflict with financial goals.
Key terms that may appear in sustainability reports:
Term | Full explanation |
Metric tons of carbon dioxide equivalent (mtCO2e) | The measurement of each greenhouse gas can be converted to metric tons of carbon dioxide equivalent using the Global Warming Potential (GWP) coefficient. |
Kilograms of carbon dioxide equivalent (kgCO2e) | The measurement of each greenhouse gas can be converted to kilograms of carbon dioxide equivalent using the Global Warming Potential (GWP) coefficient. |
Water consumption | The amount of water consumed, typically for data centers. |
Megawatt-hour (MWh) of electricity | The total megawatt-hours (MWh) of electricity consumed. |
Kilowatt-hour (kWh) of electricity | The total kilowatt-hours (kWh) of electricity consumed. |
Cubic meter (m3) of water | The total volume of water consumed, in cubic meters. |
ESG | Environmental, Social, and Governance. Sometimes used as a general term for an organization's sustainability efforts. |
CO2e | Carbon dioxide equivalent or carbon equivalent. Sometimes used to express the environmental impact of an activity. This metric converts all emissions or resource usage into a unified carbon equivalent for easier reporting. |
SDG | Sustainable Development Goals. A series of sustainability goals developed and reported by the United Nations and government organizations. |
GHG | Greenhouse Gas. Gases that trap heat in the atmosphere, such as carbon dioxide and methane. |
Inputs and outputs
Collaboration with the data ingestion team to obtain sustainability reports and carbon data from cloud service providers and other vendors.
Sustainability background information and optimization suggestions from cloud service providers and vendors, such as carbon impact comparisons for different compute resources or deployment locations, to inform decision-making.
Third-party data and recommendations for emission reduction opportunities.
Reporting and analytics to ensure that cost reports include available sustainability data.
Unit economics to ensure that key metrics include sustainability data.
Training and guidance on how to manage and view sustainability data by team, application, and more.
Cross-functional collaboration that requires specific reports, data, or coordination when a broader sustainability team exists within the organization.