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Although our industry is full of acronyms, this one is quite important. Environmental, Social, and Governance (ESG) ratings are a critical consideration to ensure the health and future of an organization.
A recent post from IDC indicates that ESG addresses sustainability strategically through a CEO/CFO lens and is business-focused versus technology-focused. Further, a good ESG partner can help cover a broad range of services, including business and data center design, consulting systems integration (SI), and engineering services. However, ESG doesn’t just end at the sustainability metric. A good data center partner will also help with initiatives including environmental issues such as GHG emissions, energy management and ecological impact; social and human capital issues such as customer privacy, diversity and inclusion; and governance and business model issues such as management of the legal and regulatory environment.
What are some of the direct benefits of ensuring you have a strong ESG and sustainability standing?
- Greater levels of sustainability and efficiency. A good ESG data center partner will help you reduce energy consumption and improve your sustainability standing.
- Active client-business relationships. With ESG in place, a data center partner will constantly communicate with tenants to improve business and ESG outcomes.
- End-user and tenant-driven standards. ESG greatly enhances transparency. Leading data center partners focusing on ESG directly help clients improve their high-priority sustainability initiatives.
- Aligned business, technology and social incentives. ESG practices are good for everyone, including the data center, the tenant and the business. A good data center partner will leverage ESG to help clients reduce costs, lower risk profiles and achieve corporate goals.
In light of this, corporate executives are increasingly motivated to improve their ESG ratings, improve overall corporate health and increase investment. They’re also focused on ESG to help their business be healthier in a digitally connected economy. This is why it’s vital to work with a colocation partner that can have a meaningful impact on customer ESG success by supplying 100% renewable power for their I.T. deployments, which tend to make up a disproportionate share of corporate energy usage.
According to a post from Principal Global, beyond steps to reduce energy use, data center leaders and tenants are constantly seeking new and innovative ways to improve energy efficiencies and promote ESG. This is where Switch and its ESG efforts come in.
Leading Designs with ESG in Mind
Switch recently received the highest Environmental rating, “E-1”, from S&P Global’s new ESG Credit Indicator Report Card. Switch is the only company among over 180 issuers in its Global Telecom sector coverage to achieve an E-1 rating, including other public and private peers in the U.S. data center industry. S&P Global introduces this ESG Report Card as a supplemental component to its already well-known corporate credit ratings and analysis. Beyond its commitment to sourcing 100% green power, S&P Global also identified Switch’s industry-leading Power Usage Effectiveness rating and the sustainability of Switch’s design and operations as critical factors in achieving the top Environmental rating within its Global Telecom sector coverage. Switch also received scores for Social (S-2) and Governance (G-2), among the highest in its peer group.
“The company’s unique facility designs and renewable energy usage make it better positioned than its broader peer group and allow for better operational efficiency and lower prices to customers, supporting its competitive position. The company has achieved 100% renewable energy power consumption with zero Scope 2 carbon emissions since 2016. As of 2021, Switch is also zero Scope 1 emissions. Separately, its patented innovations in design, power, cooling, and density allow its data centers to operate with industry-leading power usage efficiency.” – S&P Global
To learn more about how you can be a part of the most innovative and sustainable data center ecosystem, complete the contact form and we can discuss how you can get started with our ESG-ready data center ecosystem.