Sustainable Strategy Can Optimise Data Centre Supply Chains

Sustainability has become a crucial focus in the data centre industry, driven by increasing environmental concerns, regulatory pressures and the sector's significant energy consumption.

With continued challenges across global energy chains, sustainable supply chain management will likely remain a key driver of innovation and investment. These optimised services could also lead to operational cost savings and improved public perception, in addition to significant reductions in energy consumption.

Across the data centre industry, it’s expected that a new ecosystem of supply chain models will emerge. This involves partners working closer together to drive innovation together, which, in turn, will create a more resilient supply chain ecosystem.

With insights from high-level executives across the data centre industry, we examine how data centre businesses and operators can best optimise their supply chains with sustainability as a crucial focus.

The impact of digital transformation on data centres

The global data centre landscape is changing, with regulators like the European Commission introducing new standards for businesses to report their sustainable progress. Notably, operators are obliged by May 2025 to provide the European database all sustainability information and KPUs for the data centres they operate, enterprise, colocation or otherwise.

Governance on data centre sustainability varies by region or country and more are set to come, particularly as the United Nations (UN) is aiming to reach net-zero emissions by 2050.

However, these changes are taking place amid a background of ongoing digital transformation, where data centres continue to try and meet growing demands of AI. 

“It is a dynamic landscape, but the regulations we have today have already begun to define sustainable data centre development and operations.

“Worldwide, data centres are responsible for between 1-2% of total power consumption. Most data centres are in the US, where as much as 9% of energy usage could be attributed to data centres by 2030. Today’s hyperscale data centres typically require 10-14kW per rack, but demand is expected to rise because AI racks contain energy-hungry graphics processing units. In the next decade, US data centre energy usage could grow as much as 20% and reach 35GW.”

As a result, increasing sustainability regulations are expected to cause the global data centre sector to shift. These transformative changes will inevitably impact the reduction of energy consumption, waste management and carbon emissions.

Gary Tinkler, Managing Director of Data Centres at Northern Data Group, says: “These regulations will lead to the adoption of efficiency cooling systems, the integration of renewable energy sources and waste management strategies to reduce e-waste. 

“Data centres may also be required to be more transparent about their environmental impact, including the publication of regular sustainability reports.”

Increasing regulation – particularly power usage effectiveness (PUE) targets in Europe – means data centre operators are continually focused on sustainability. With this in mind, Gaelle Mogabure, Sustainability Lead at VIRTUS Data Centres, explains that the industry must continue to educate the public and regulatory bodies so that sustainability targets are met.

“There needs to be ongoing collaboration between all businesses in the supply chain and ecosystem, as well as the regulators, if sustainable practices are to be widely adopted in order to meet these kinds of energy consumption targets while still enabling the data centre industry to meet increasing demand,” she says.

“Something else that the industry should be aware of in the supply chain is the increasing focus on human rights. While there isn’t any law or mandatory reporting yet, it’s crucial our sector starts to gear up for it and implement internal processes to meet future reporting.” 

Flipping the script: A renewed sustainability focus

A renewed focus on sustainability has ultimately changed how companies are approaching their supply chain management. This doesn’t just involve data centre infrastructure, but also conversing across the entire chain and working closely with suppliers to set climate targets and identify ways to reduce emissions.

For instance, Northern Data Group is continually looking for ways to reduce environmental impact across its supply chains. 

“This involves using infrastructure that not is not only more efficient but is more environmentally responsible at the same time too,” adds Gary. “We prioritise partnerships with suppliers which have strong sustainability credentials, focusing on sourcing eco-friendly materials and ensuring that production and delivery processes are as energy efficient as possible.”

The data centre company has also implemented USystems Rear Door Heat Exchangers (RDHx) to better cool its high-performance computing (HPC) and AI hardware. As a result, Northern Data Group has achieved approximately a 65% reduction in energy costs for cooling compared to traditional data centre cooling methods. 

“USystems’ manufacturing site operates on biomass energy and uses repurposed steel in its construction processes, further enhancing sustainability across our supply chain,” Gary continues.

Likewise, VIRTUS Data Centres also commits itself to engaging with its key suppliers on sustainability topics such as the embodied carbon of products, energy efficiency of key equipment and Environment, Health and Safety (EHS) best practices in factories.

“We already screen and evaluate vendors in our supply chain on management systems and energy efficiency, but we are always looking at embedding further sustainability in our procurement process,” Gaelle comments. “In future, we plan to take into consideration the overall sustainability ambitions of the vendor. This includes looking at their net-zero roadmaps, water management and social commitments, among other things.”

One of the strategies VIRTUS has employed is deploying an adiabatic cooling solution at one of its key sites to reduce water consumption. The company is working closely with the cooling manufacturer to develop alternative operating strategies. This has now become the standard operating methodology for the product, which Gaelle hopes will contribute to more optimised water use across other data centres.

She adds: “VIRTUS is also always investigating innovative sustainability solutions such as low-carbon concrete and green steel to replace some of the traditional options, as well as use of machine learning in operations.”

Sustainability is also a crucial element of supply chain management for Dow, with the company adopting this renewed focus to ensure the highest standards across all areas. The company believes that transitioning to a circular economy is vital for a sustainable future and continues to collaborate with its partners to tackle challenges like improving energy usage and reducing material waste.

“We also design our material solutions with end of life in mind as we collaborate with our customers to meet their specific needs,” says Jason. “Our material solutions include silicone adhesives, sealants and other products that use silicone-based technology. Traditionally, silicones have not been recyclable. Yet Dow is committed to advanced silicone recycling on a global scale. An important part of that effort is collaborating with customers as we invent, pilot and evaluate new methods of silicone recycling. Meanwhile, we are reducing our use-phase emissions while optimising our manufacturing.”

He adds: “Dow is committed to reducing waste, shrinking carbon footprints and lowering Scope 1 and Scope 3 emissions for waste treatment. That is true across the entire supply chain, from the resources that we use to the material solutions we provide to customers.”

Optimising sustainable supply chain operations

Data centre companies looking to optimise their supply chains will need to prioritise reducing energy consumption moving forward. As demands for AI and HPC continue to grow, data centres will need to not only consider which servers and materials have the most sustainable focus, but also utilise their partners and vendors to save energy across the entire chain.

“Heat is the enemy of reliable electronics,” Jason explains. “Companies that make servers and other data centre electronics have an especially important role to play. For example, in addition to choosing adhesives that are made with a smaller carbon footprint, electronics manufacturers can select products that cure at room temperatures or with ultraviolet light (UV) instead of with ovens. 

“Data centre companies that are seeking to optimise their supply chain through sustainable practices must also consider the circular economy. Companies that partner with Dow can design for recyclability by sourcing certified charcoal for silicon metal and choosing a liquid silicone coolant with low global warming potential and zero ozone depletion potential.”

Gaelle adds: “Engage key suppliers regularly on sustainability topics to identify areas of collaboration and improvement. Operators should share their sustainability goals and clearly articulate how suppliers can contribute to achieving those goals. They should also embed robust sustainability screening in procurement processes.”

In order to reduce environmental impact further, incorporating technology is crucial, as Gary explains: “Companies should consider deploying smart technologies that allow for real-time monitoring and adjustment of energy and water consumption. Data plays a key role in understanding current business performance and provides a platform to make the adjustments to improve.  

“It’s also important to work with organisations that share a commitment to sustainability and can demonstrate their own efforts to reduce environmental impact within their supply chains. Data centre companies should proactively exceed current standards, which will not only future-proof their operations but also enhance their competitive edge in the marketplace.”

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