Like water, energy and waste management, digital telecommunications and data centers have become utilities essential for modern societies to function sustainably. It is generally accepted that the increasing frequency and intensity of extreme weather events -- and the onset of gradual, long-terms shifts in weather patterns and climate -- pose existential threats to critical information and communications technology (ICT) supply chains, as well as infrastructure.
But a recent report from Riverside Technology and Acclimatise found that the business risks of climate change as they relate to telecommunications and data centers are poorly recognized -- particularly with respect to infrastructure and supply chains. Similarly, climate change resiliency and adaptation plans in this critical segment of the U.S. ICT sector are poorly developed, concluded the report, which was conducted on behalf of the federal government's General Services Administration (GSA).
“Despite the importance of these sectors, the climate risk they face is poorly understood. Even less understood are climate risks to the supply chains both sectors rely upon,” the authors of Climate Risks Study for Telecommunications and Data Center Services highlight. Furthermore, though it boosts operational efficiency and the bottom line, the recent trend that has seen more and more companies sharing ICT resources – platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS), for instance – increases the vulnerability of critical ICT infrastructure and supply chains to the impacts of extreme weather events and more gradual shifts in climate.
Fifty-three percent of last year's global insured losses from natural disasters occurred in the U.S.
2014 was the second consecutive year of below-normal catastrophe losses. The year before, however, saw a record number of “billion-dollar weather disasters” around the world, according to Aon Benfield's research.
As the GSA report authors point out, “Disruptions in the ability to communicate or access information severely inhibit governments, companies, and citizens, and in periods of disaster or extreme events, this inability to communicate puts national and human security and business value at risk. Climate variability and change may threaten the infrastructural integrity and productivity of these critical sectors, increasing the number and severity of disruptions. Extreme or unusual weather can lead to cascading impacts felt across sectors and borders.”
Climate risk and vulnerability in the ICT sector are poorly understood, particularly when it comes to recognizing risks and planning to adapt to gradual, long-term shifts, the report's authors continue. Even less well-understood are the risks climate change poses to ICT supply chains, as well as how resilience can be enhanced. "Extreme weather events, like Hurricane Sandy in 2012 and the Thai floods in 2011, dramatically show the potential economic cost of climate change in the near term,” the authors state.
“However, cumulative or gradual climate impacts are less likely to be studied due to failure to spot the signals if operating performance gradually deteriorates, uncertainty of the timing and magnitude of impacts, the absence of stakeholder consensus in the wake of an extreme event, and the short- term decision-making time frames of many businesses.”
The report's authors also note that ICT equipment used in telecoms and data centers “were designed to function within within specific climate and environmental conditions." Climate change (which can include both incremental changes as well as extreme events) can impact the operating parameters and enterprise supply chains, causing impacts to telecoms and data center companies and their customers.
“Impacts may result in changes to functionality, quality of service, return on investment, business continuity, and cost, in addition to cascading impacts on the diverse customers that rely upon them. Value protection strategies are required to address these risks.”
Compounding climate risks is the trend toward outsourcing of telecoms and data center functions to third-party hosting companies and managed services providers, according to the report. Such initiatives increase operational efficiency and can result in reduced IT costs and new revenue-generating opportunities. But they also reduce redundancy across the network and generate single points of failure, the report's authors highlight.
Drawing on case studies from around the world, the GSA report authors offer examples of adaptation options and early instances of initiatives being undertaken by telecoms companies to enhance climate resilience. They also provide a summary list of key recommendations:
An experienced, independent journalist, editor and researcher, Andrew has crisscrossed the globe while reporting on sustainability, corporate social responsibility, social and environmental entrepreneurship, renewable energy, energy efficiency and clean technology. He studied geology at CU, Boulder, has an MBA in finance from Pace University, and completed a certificate program in international governance for biodiversity at UN University in Japan.