Net Zero Initiative for IT

Understanding the Role of Digital Solutions in the Global Net-Zero Effort

Executive Summary

This report is a guide to Pillar B of the Net Zero Initiative (NZI) dashboard as it applies to the IT sector. Pillar B aims to quantify a company's positive impact on the greenhouse gas emissions of its ecosystem. Here, we focus on the “Avoided Emissions” indicator, reflecting the contribution of a company’s solutions to reducing its clients’ direct and indirect emissions compared to a baseline scenario.

This report is divided into four parts:

General Guidelines describe the IT sector's contribution to global carbon neutrality
Characterization of Solutions explains how IT solutions can help decarbonize an activity
General Methodology Key issues to address in IT avoided emissions assessments
Families of Solutions – Toolbox Detailed guidelines for four families of solutions

PART 1 – THE IT SECTOR’S CONTRIBUTION TO GLOBAL CARBON NEUTRALITY

Summary of the Challenges of Decarbonization in the IT Sector

The digital sector accounts for ~3% of global GHG emissions^[1], and its rapid growth makes meeting global decarbonization targets even more challenging.
The digital consumption for its own sake (A) and the digital “solutions” – aimed at digitizing /connecting other products and services – (B) face the same decarbonization challenge: reducing their absolute emissions by 45% by 2030^[2].
Like all other companies, IT companies mustquestion the relevance of their product and service portfolio in a changing world and reflect on the compatibility of their business model in a low-carbon future (see Box 1). Technical progress does not, by its very nature, prevent emissions.
Both (A) and (B) companies should also fund emissions reduction andDevelopment of Carbon Sinks outside their value chain. This fair contribution to global carbon neutrality cannot “compensate” or “offset” an insufficient reduction in their own emissions.

Summary of IT's Role in Decarbonization

Using this guidance, companies (B) that sell digital “solutions” can assess whether their products help their customers reduce their own emissions.
The avoided emissions indicator serves as a short-term guide to inform the company's strategic decisions, allowing, for example, to target markets for decarbonization.
Avoided emissions are not fungible with induced emissions and therefore shall not be used to claim a hypothetical “carbon neutrality” for the company or its solutions.

PART 2 – HOW CAN IT SOLUTIONS HELP DECARBONIZE AN ACTIVITY?

Summary of the Characterization of Solutions

This method covers both IT for Green – IT Decarbonizing Other Sectors – and (IT for)Green IT – Decarbonizing the IT sector – solutions.
To conduct an assessment of avoided emissions, Companies must be able to clearly understand and define how each solution affects a physical system, and either optimizes, substitutes, or reduces the need for it, as shown in the following diagram:

* Enablementin itself is not a means of decarbonization: Companies must clearly identify which of sufficiency, efficiency, or substitution is “enabled” by a solution, and explain why the system could not be decarbonized without IT.

PART 3 – ISSUES TO ADDRESS IN IT AVOIDED EMISSIONS ASSESSMENTS

Summary of the General Methodology for the IT Sector

Claiming avoided emissions sends a strong signal to the market, requiring the company to successfully navigate the 6 Eligibility Gates of NZI4IT, 6 conditions that define the legitimacy of avoided emissions claims.
Quantifying avoided emissions for IT solutions can be extremely challenging, and requires accurate data, especially to prove that a substitution took place.
The guidance complements NZI Pillar B Guide About the time frames and geographic scope of assessments:
- annual ex-post analyses should be given priority over forecasts over the lifespan of a solution.
- location-based Accounting for electricity consumption remains mandatory.
11 methodological challenges Issues specific to the IT sector are explained and resolved with accompanying guidelines:
- Baseline Issues: Reference scenarios must be updated regularly to reflect the rapid changes in the IT sector over the years. Low-tech alternatives must also be part of the baseline's market mix.
- Rebound Issues: “Is there a real substitution?" – Rebound is ubiquitous in IT and should always be taken into account. For cloud migration, the The data collection must be as specific as possible: No extrapolations of avoided emissions can be made for an entire customer base based on a single customer case. The guidance also helps identify rebound effects.
- “Enablers” are redefined through the concepts of sufficiency, efficiency, and energy substitution, by distinguishing the levels of maturity of solutions.
Reports on avoided emissions must specify the reference situation hypotheses and shall not encourage overconsumption.
Automation, especially Artificial Intelligence (AI) solutions cannot claim avoided emissions simply because they replace a human job.

PART 4 – SECTOR-SPECIFIC TOOLBOX FOR ASSESSING AVOIDED EMISSIONS FOR 4 IT SOLUTIONS

Summary of the Toolbox Contents

The toolbox provides detailed guidelines to calculate the emissions from the reference situation and, based on the solution scenario, evaluate rebound effect, identify required data and important parameters for 4 families of solutions:

Circularity: repairs, refurbishment…
Cloud & “Virtualization”: infrastructure sharing,cloud migration…
Demand-Offer Matching Platforms
Demand-size optimization and sufficiency

No avoidance factors were calculated, since the method requires a high level of specificity for any calculation of avoided emissions, i.e., obtaining specific customer and market data—not just extrapolated data—to conduct the assessment.

Source: The Shift Project, 2021; This figure includes the production and use of terminals, data centers, and networks.

“Guidance for ICT Companies Setting Science-Based Targets,” SBTi, 2019.