Covering Disruptive Technology Powering Business in The Digital Age

Authored By: Michael Kurniawan, Schneider Electric Secure Power Business Vice President for Singapore, Malaysia & Brunei

The IT sector has a long history of being one of the most heavily regulated industries. From electrical and safety standards to ensuring that equipment can be recycled, compliance with this constantly evolving regulatory landscape is a major challenge for data centre operators. With the criticality of data centres clearly gaining attention in recent headlines, and with ongoing discussions around how to address the current climate crisis, ESGs and government sustainability regulations are more and more becoming top priorities across the IT industry.

Today, Southeast Asia is projected to be the fastest-growing data centre market. A report by Cushman & Wakefield revealed that the region is expected to have an annual growth rate of 12.9% with the ongoing digital efforts. Narrowing down to Malaysia, the nation is fast becoming a hotspot for data centres with the increased inflow of tech players in the past two years. Many operators are looking into building hyperscale data centres (HDCs) in Johor of late. However, these data centres are also expected to consume large amounts of electricity and water, raising concerns on long-term sustainability.

While acceleration in digital transformation and automation continues all around us, it requires more IT compute capacity and more data centres, which has drawn the attention of environmental groups and consumers concerned about climate change. The resource consumption and carbon footprint of data centres have also attracted the attention of government and climate “watchdog” organisations. Lawmakers are increasingly acting to curb the environmental impact of data centres through regulation.

But with this rapid acceleration to a more automated and more digital world, efficient and reliable data centres are at the heart of the green future. As our lives are increasingly online and our digital footprint expands, so too will the need for green data centres. Proactively building green data centres in accordance with government regulations will become critical to ensuring that the carbon footprint from data centres does not increase. Companies that do not comply with these regulations face revocation of their licence to operate.

Governments’ Green Initiatives and Regulations in the Region

In Malaysia, tech players have been granted approval to build and manage HDCs with conditions in place. The government hopes that the construction of these data centres will build a strong backbone for the nation’s sustainable digital ecosystem. In support of sustainable operations, Bank Negara Malaysia along with its ASEAN partners will steer the ASEAN Climate Change and Principle-based Taxonomy (CCPT).

Singapore raised a moratorium on new data centres in 2019 to address carbon emission challenges. One of its policies includes ramping up the uptake of renewable energy, where Singapore aims to increase its solar capacity by more than seven times by 2030, bringing it from seven-fold to a 2-gigawatt peak (GWp).

As for Brunei, the country’s monarch spoke up recently during the 28th Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting. He highlighted the importance of pursuing a green and sustainable growth agenda, emphasising the need for countries to share best practices and policy actions in working together towards a greener future.

As many of these emerging recommendations become regulations, data centre owners need to take action now to ensure compliance in the future.

Follow This Five-Step Sustainability Blueprint

As data centre operators try to navigate the evolving regulations from different governmental agencies, while keeping up with an increase in demand of our digital-first world, Schneider Electric has established a clear framework for how data centres can achieve a holistic environmental sustainability approach.

1. Set a bold actionable strategy. Use a data-driven consultation approach to help you create an actionable strategy and reach your climate and sustainability ambitions. Ensure you are leveraging data for optimisation, analytics, and reporting. Today’s organisations are recognising that improved sustainability performance contributes to improved financial performance, and investors have taken notice as well. While government regulations set the minimum bar for sustainability compliance within data centres, industry pioneers are pushing the boundaries of their sustainability goals with climate commitments becoming increasingly expected by employees, customers and investors alike.
2. Implement efficient data centre designs. Utilise an architectural approach to create customised, efficient, repeatable, serviceable, vendor-agnostic data centre designs, keeping in mind compliance, transparency, and higher environmental performance of products.
3. Drive efficiency in operations. Leverage software and digital services to enable remote monitoring capabilities. Optimise the lifespan and efficiency of your systems by defining a clear strategy for maintenance and modernisation to optimise the lifespan inclusive of recycling services for end-of-life products to ensure circular economy best practices.
4. Buy renewable energy. Explore a custom renewable procurement strategy that includes microgrids, power purchase agreements (PPAs), virtual power purchase agreements (VPPAs), energy-as-a-service and Energy Attribute Certificate (EACs). For example, in preparation for the infrastructure support towards energy transition, the largest electricity utility in Malaysia has signed PPAs with nine companies involved in developing large scale solar energy generating facilities in five Malaysian states this year.
5. Decarbonise supply chains. Evaluate your Scope 3 footprint, identify and execute strategies to meet decarbonisation objectives and utilise digital performance tracking and reporting for your decarbonisation program. Most recently, a leading energy company providing oil and gas in Malaysia is putting its efforts into transitioning to a net-zero emission business. To do so, not only the group has taken steps to reduce its Scope 1 and Scope 2 emissions, but the group is also looking into addressing Scope 3 emissions, with about 85% of emissions under this scope.

Sustainable business practices are on track to becoming standard business, and some may argue they already are. Aside from being the best path towards addressing the most pressing issue of our time, they’re often the best solution from a business standpoint. In the long run, it is advised for data centre operators in Malaysia to form strategic partnerships with providers, lawmakers, and the government to work towards a sustainable ecosystem. Data centre operators should not be scared off by changing government regulations, instead, they should use them as an opportunity to embrace a greener future and push the boundaries of their sustainability commitments.

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