Digital infrastructure’s defining moment on climate

To grapple with the rising demand for their services while reducing emissions, leaders must embark upon a comprehensive transformation.

The large and rapidly growing digital infrastructure sector, which includes telecoms and data center service providers, and the electronics and equipment that go into their networks and facilities, is facing an important climate inflection point. Recent research by the Global Carbon ProjectOpens in a new window indicates that global carbon emissions from fossil fuels rose to a record high in 2024, and that there’s still “no sign” that a peak has been reached. Meanwhile, the demand for telecom and data center services is rising extremely rapidly, in part thanks to the widespread adoption of AI. The sector’s headlong growth is driving increasing processing and storage capacity, higher density, and more power-hungry chipsets. The rising demand for energy these developments spur has the potential to negate much of the progress the industry has made on reducing emissions. According to the International Energy Agency’s Electricity 2024 report (PDF)Opens in a new window, data centers worldwide consumed a massive 460 terawatt-hours (TWh) in 2022—but by 2026 this could exceed 1,000 TWh, more than double the 2022 total, and an amount “roughly equivalent to the electricity consumption of Japan.”

Along with potential climate impacts, the rising energy use and emissions bring regulatory and reputational risks. Without concerted action, sector-wide emissions might balloon at the very moment that new reporting requirements, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), make such metrics highly visible to stakeholders.

To confront these challenges, companies in the digital infrastructure ecosystem must adopt a hands-on, bottom-up transformation that will enable the industry to decarbonize its operations and activities—and while doing so, build and scale an AI grid infrastructure that can enable the rise of sustainable operations across all sectors of the global economy. Just as each function contributes today to the profit and loss statement, every business function will need to contribute to the reduction of Scope 1, 2, and 3 greenhouse gas (GHG) emissions. 

A sizable majority of GHG emissions occur either upstream in the value chain or downstream in how products and services are used by customers. As a result, progress toward net zero will require intensive collaboration across the technology ecosystem and along value chains, together with a willingness to explore new business models. The good news: there are clear upside opportunities for leaders across these businesses to get a clearer view of Scope 3 emissions—and to take action. 

The large and rapidly growing digital infrastructure sector, which includes telecoms and data center service providers, and the electronics and equipment that go into their networks and facilities, is facing an important climate inflection point. Recent research by the Global Carbon ProjectOpens in a new window indicates that global carbon emissions from fossil fuels rose to a record high in 2024, and that there’s still “no sign” that a peak has been reached. Meanwhile, the demand for telecom and data center services is rising extremely rapidly, in part thanks to the widespread adoption of AI. The sector’s headlong growth is driving increasing processing and storage capacity, higher density, and more power-hungry chipsets. The rising demand for energy these developments spur has the potential to negate much of the progress the industry has made on reducing emissions. According to the International Energy Agency’s Electricity 2024 report (PDF)Opens in a new window, data centers worldwide consumed a massive 460 terawatt-hours (TWh) in 2022—but by 2026 this could exceed 1,000 TWh, more than double the 2022 total, and an amount “roughly equivalent to the electricity consumption of Japan.”

Along with potential climate impacts, the rising energy use and emissions bring regulatory and reputational risks. Without concerted action, sector-wide emissions might balloon at the very moment that new reporting requirements, such as the EU’s Corporate Sustainability Reporting Directive (CSRD), make such metrics highly visible to stakeholders.

To confront these challenges, companies in the digital infrastructure ecosystem must adopt a hands-on, bottom-up transformation that will enable the industry to decarbonize its operations and activities—and while doing so, build and scale an AI grid infrastructure that can enable the rise of sustainable operations across all sectors of the global economy. Just as each function contributes today to the profit and loss statement, every business function will need to contribute to the reduction of Scope 1, 2, and 3 greenhouse gas (GHG) emissions. 

A sizable majority of GHG emissions occur either upstream in the value chain or downstream in how products and services are used by customers. As a result, progress toward net zero will require intensive collaboration across the technology ecosystem and along value chains, together with a willingness to explore new business models. The good news: there are clear upside opportunities for leaders across these businesses to get a clearer view of Scope 3 emissions—and to take action.