The carbon footprint of data: Decarbonizing your sustainability reporting

The hidden carbon footprint of ESG reporting

Companies collect and store large volumes of ESG data from internal operations, suppliers, and third-party sources. Each dataset requires energy-intensive processing, storage, and transmission, contributing to Scope 3 IT-related emissions.

Where do these emissions come from?

• Cloud computing – Data centers account for 1-1.5% of global electricity use, with demand expected to double by 2030 (IEA).
• Digital communications – Every email, file transfer, and video call adds to emissions. An email with an attachment can generate up to 50g of CO₂ (Carbon Literacy Project).
• Data redundancy – ESG data is often stored in multiple locations, increasing storage needs and energy consumption.

The impact of unoptimized ESG data storage

Imagine a company that is manually collecting sustainability data from multiple departments and suppliers stores duplicate copies across spreadsheets, cloud platforms, and email archives. 

Over time, this results in:

• Excessive cloud storage use, increasing costs and digital emissions.
• Unnecessary data duplication, leading to longer processing times.
• High-energy computing loads, as multiple systems process the same data.

By consolidating ESG data into a single reporting platform, companies can reduce data redundancy, lower storage requirements, and minimize unnecessary digital emissions.

The balancing act: Digital efficiency vs. sustainability

Sustainability teams rely on data-heavy digital platforms to track and report ESG performance. However, not all reporting workflows are optimized for efficiency.

Common inefficiencies in ESG data management

• Frequent, unnecessary data refreshes – Some companies update ESG reports daily, even when metrics change monthly or quarterly.
• Multiple disconnected tools – Using separate platforms for carbon accounting, compliance, and reporting increases storage and energy use.
• High-frequency data transfers – Constant syncing of ESG data across different systems multiplies energy demand. Think of it like running two separate generators just to power one building. It’s inefficient to say the least and not a long-term solution, either.

Reducing energy consumption in ESG workflows

If your sustainability team uses several software platforms for emissions tracking, supply chain assessments, and financial reporting, they’re likely generating excess waste without realizing it, even if these systems are supposedly interoperable. Because data updates occur automatically across all systems, even minor changes trigger unnecessary cloud processing and energy use.

By adjusting data refresh rates, the company:

• Reduces computing loads by down by several factors, cutting digital emissions.
• Saves on IT infrastructure costs by lowering cloud usage.
• Improves system efficiency without losing reporting accuracy.

Not all ESG metrics require real-time tracking—adjusting reporting frequency can lower emissions while maintaining data integrity.

4 practical steps to decarbonize ESG reporting

Companies can reduce their digital carbon footprint by optimizing data storage, streamlining workflows, and choosing low-impact IT infrastructure.

How to minimize emissions in reporting workflows

1. Optimize cloud storage and software use

• Consolidate ESG data into a single platform to reduce redundancy.
• Use compressed file formats and remove outdated reports.
• Audit ESG data storage annually to minimize excess data retention.

2. Reduce energy-intensive computing processes

• Batch-process ESG data instead of real-time syncing where possible.
• Limit high-frequency report updates to only essential metrics.
• Adjust data refresh cycles based on reporting needs.

3. Choose low-carbon digital infrastructure

• Use cloud providers with renewable energy commitments such as Google Cloud, AWS, or Microsoft Azure (Google Sustainability Report).
• Consider regional data centers with lower grid emissions.
• Implement energy-efficient IT policies, such as server optimization and data deduplication.

4. Reduce unnecessary digital communication

• Send ESG reports via shared links instead of email attachments.
• Optimize internal reporting schedules to reduce data transfers.
• Limit large file storage for non-critical ESG documentation.

The role of carbon accounting in digital emissions reduction

Companies looking to fully account for their environmental impact should track digital infrastructure emissions within their Scope 3 reporting.

What should be measured?

• Cloud computing emissions – Energy consumption from cloud-based ESG platforms.
• Data storage emissions – Energy used to store ESG reports, raw data, and backups.
• Digital communication footprint – Emissions from ESG-related emails, file sharing, and remote collaboration.

Hypothetical scenario: Tracking and reducing digital carbon emissions

A company adds IT-related emissions to its Scope 3 ESG report and finds that:

• Data centers contribute 10-15% of total Scope 3 emissions.
• By switching to a cloud provider running on 100% renewable energy, the company cuts IT-related emissions by 40%.

Tracking digital sustainability operations provides a more complete emissions profile and helps identify areas for reduction and optimization.

Sustainability starts with smarter ESG reporting

Companies focused on sustainability reporting efficiency should also consider the carbon footprint of digital infrastructure.

• ESG reporting has a carbon cost—optimizing workflows reduces emissions.
• Data management efficiency matters—removing redundancies lowers energy use.
• Choosing renewable-powered cloud services minimizes IT-related emissions.
• Tracking digital emissions strengthens overall carbon accounting strategies.

ESG reporting is essential, but how companies manage and store their data determines whether they are truly walking the talk on sustainability. All the more, topics like this showcase just how limitless the scope of emissions, sustainability, and compliance can be once you begin to delve into them.

But all of this requires the right solution; one that is capable of handling every conceivable compliance and sustainability task for your business, from Carbon Accounting to ESRS. If you want some insight into the current solutions available (and to see how highly ours scored compared to the rest of the market), don’t just take our word for it.

Check out this full report by Verdantix on what capabilities you should have included in your ESG data management software.