Why public clouds lead with renewables

It’s no surprise that the top tech companies are also the top cloud companies. It’s also no surprise that these top tech companies are making big investments in green energy. Amazon, Microsoft, and Meta are now the three largest buyers of solar and wind power, according to new data from BloombergNEF, and they easily outdistance all other corporate buyers.

Although they have altruistic motivations, keep this in mind: Enterprises that consume technology (the market for public cloud providers) now actively seek cloud providers that are green. Enterprises, as well as investors, typically use the accepted standard ESG (environmental, social, and governance) metrics to determine how ethical and sustainable an organization is in practice. According to McKinsey, companies that have higher ESG ratings also outperform the market. Thus many enterprises see that short-term sustainability strategies and investments can lead to positive longer-term business outcomes.

ESG metrics drive the interest in green cloud by both cloud providers and enterprises. Most executives realize that existing data centers within enterprises still draw huge amounts of power, typically from coal-fired power plants. Cloud providers also see the benefits of taking steps to use more green power sources, such as renewables. It’s a win-win: The environment benefits, enterprises’ market ratings benefit, and the public cloud providers’ bottom lines benefit. 

Whatever gets storage and compute resources to be greener and more sharable is okay by me. Moving to public clouds clearly does both.

Also, keep in mind that you can’t do the world any good if you don’t succeed as a business. As Harvard Business School Professor Rebecca Henderson notes in the online course Sustainable Business Strategy, there is no way for you to do good in the world if you’re not doing well financially. This suggests that doing well and doing good are intertwined. Here’s something I’ve noted: Most poorly operating businesses rarely invest in their community, and sustainability isn’t a factor when they pick service providers and vendors. I’m not sure if that’s karma or that people who make poor choices do so consistently across all aspects of the business.

Most enterprises, including cloud computing providers, recognize that fossil fuels are literally going the way of the dinosaurs. Sustainable wind and solar are part of our new and still-to-come power reality. With the world looking for greener alternatives—either to appear virtuous or to truly make a difference—this green trend is a nice outcome of the growth of cloud computing, for both businesses and the planet. After all, they both need to succeed in the end, don’t they?