Technology Portfolio Management (TPM) Best Practices

Overview

Cloud computing represents a growing and significant portion of the technology portfolio’s environmental footprint for most enterprise organizations. Cloud energy consumption is not inherently worse than on-premises energy consumption — major cloud providers operate at a scale and with an operational efficiency that typically produces better energy efficiency per unit of compute than equivalent on-premises infrastructure operated by individual enterprises. But cloud energy consumption is not inherently better either, and the carbon intensity of cloud workloads varies substantially depending on the provider, the geographic region, the energy mix of the data centers in use, and the efficiency with which the organization has optimized its cloud workloads. Governing cloud technology energy consumption and carbon intensity is a governance discipline that produces both environmental outcomes and financial ones: cloud workload right-sizing that reduces carbon intensity also reduces cloud spending.

Best Practice

Govern cloud technology energy consumption and carbon intensity through four complementary disciplines. Provider sustainability assessment: include each cloud provider’s published renewable energy commitment, current renewable energy percentage, and carbon neutrality or net-zero commitment as attributes of the Cloud and Infrastructure Services Inventory records. Use these attributes as inputs to the Sustainability and ESG Score for cloud services and as factors in cloud provider selection and workload placement decisions. Regional carbon intensity awareness: use carbon intensity data for cloud provider regions to inform workload placement decisions for workloads that are not latency-constrained by geographic requirements. Placing a workload in a region with high renewable energy penetration rather than an equivalent region with lower renewable energy penetration can reduce the carbon intensity of that workload substantially with no performance or financial penalty. Workload right-sizing: apply FinOps discipline to cloud workload sizing as a sustainability governance discipline as well as a financial one. Over-provisioned cloud workloads consume more energy than their actual compute requirements demand — right-sizing them reduces carbon intensity and cloud cost simultaneously. Carbon-aware workload scheduling: for batch workloads that are not time-constrained, implement carbon-aware scheduling that shifts execution to periods and regions where the real-time carbon intensity of the grid is lowest, further reducing the carbon impact of the organization’s cloud operations.

Benefit(s)

Governing cloud technology energy consumption and carbon intensity produces financial and environmental benefits simultaneously, making it one of the highest-return sustainability governance investments available to the technology portfolio. FinOps-aligned right-sizing reduces both cloud spending and carbon intensity. Regional placement decisions reduce carbon intensity without increasing cost. Provider sustainability assessments inform commercial decisions that align the organization’s procurement patterns with its sustainability commitments. And the carbon intensity data maintained in the Cloud and Infrastructure Services Inventory feeds directly into the ESG reporting metrics that CSRD and other applicable frameworks require.