Materiality, Impact, and Risks
The internet and telecommunications services that we offer are based on our network infrastructure and data center operations. These are responsible for by far the bulk of energy used within the Group. This energy usage and the resulting carbon emissions impact the environment and the climate. Other, lesser, contributory factors include the use of power in our office buildings, of fuel for vehicles, and of materials in our logistics operations in particular, as well as of our own IT hardware. Given our plans to build a 5G network, our energy consumption can be expected to increase further in future.
In addition, our business relationships have a material impact on the environment, especially from the use of our business partners’ mobile networks and fixed networks, and the energy consumption associated with this. Environmental impacts also result from the use of energy and resources, and from potential pollution along the value chain for the devices and products (especially smartphones, tablets, and routers) that we offer. Factors here range from their manufacture through their shipping to customers down to their eventual disposal.
Above and beyond this, the role of digitalization as an enabling technology for greater climate protection should be emphasized, both in our own business and in relation to products and business relationships.(1) One precondition for such a positive effect is that the additional energy requirements are not met from fossil fuels but from renewable energies, since otherwise the use of digital technologies, algorithms, blockchain, and the like would be accompanied by larger carbon footprints. In addition, it can be expected that the new 5G mobile network standard will lead to an increase in electricity consumption, among other things because it offers new technological opportunities, such as the ability to network machinery and vehicles (this is known as the “Internet of Things” or IoT).
(1) See e.g., the Bitkom article, dated March 18, 2021.
We aim to use resources efficiently and to contribute to climate protection.
Environmental and climate protection are relevant for a large number of stakeholders. This can be seen both at the level of society as a whole, e.g., in the Fridays for Future movement, and with our employees, whose interest in environmental protection can be seen in many areas of their daily work. The topic is increasingly being addressed at a political level, e.g., through Germany’s Climate Protection Program, CO2 pricing, the Paris Agreement, and the UN Climate Change Conferences (Conference of the Parties – COP). It is also becoming more and more of an issue for investors and analysts when selecting investments, while customers emphasize the importance of using green energy e.g., for cloud products, as is the case for IONOS.
Apart from the physical risks posed by climate change – especially due to rising temperatures, which lead to the need to cool data centers more, but also to increasingly extreme/poor weather conditions that could cause infrastructure damage and that therefore both impact our Company – this topic also has an indirect impact on United Internet. As an energy user, the organization needs to reduce its carbon emissions if it is to avoid potential market and reputational risks. In addition, the growing risk of political and technological risks due to the urgency of the topic must be borne in mind; one potential example here is stricter legislation requiring corresponding effort and expense to implement. If our various stakeholders’ expectations are not met, this could negatively impact our reputation, revenues, or earnings; conversely, positioning ourselves positively here could offer opportunities.(1)
(1) Irrespective of the materiality of climate and environmental protection demonstrated here, the EU Guidelines recommend reporting on climate issues even if only one of the two perspectives (either “environmental and social” or “financial”) is material.
The management approach aims to promote the efficient use of resources, enabling us to cut costs and contribute to climate protection. Particularly in view of our energy consumption, our goal is to continuously increase the efficiency of our infrastructure, and especially of our data centers. Although a reduction in our absolute consumption would be desirable, this is not a realistic goal given the increasing digitalization of the economy and society. This applies both to our data centers, which in their role as the backbone for digital applications are experiencing increasing demand, and to our fiber-optic network which, as by far the most powerful transmission technology, is especially sought-after.
Our main energy consumers deploy management systems to optimize its usage, among other things. The data centers operated by IONOS and Strato are certified in accordance with ISO 50001, while an ISO 14001-based environmental management system (EMS) is used for the fiber-optic network. 1&1 IONOS Holding’s data center operations are climate-neutral, since we both source electricity generated from renewable energy (“green electricity”) and offset the share of electricity from non-renewable energy sources that we use. We also reduce the impact of our fiber-optic network operations by using green electricity. In addition, we aim to minimize the consumption of resources and materials, e.g., in our logistics operations, and to enable our customers to dispose of their products and hardware in an environmentally friendly manner. Please see the following sections for further details.
1&1 IONOS Holding’s data centers are managed by the TechOps Hosting and Data Center units, which report directly to 1&1 IONOS SE’s or Strato AG’s CTO. The specialists in these units work together with Technical Control to manage electricity consumption and energy efficiency.
Energy consumption is measured in all relevant areas and, where this makes sense, is also examined on a relative basis (e.g., per employee or in proportion to revenue), so as to take growth effects into account, for example. In addition, management systems are used to constantly optimize consumption, particularly in data center and fiber-optic network operations. We aim to use this and other data in future to calculate our carbon footprint; this will document and quantify material sources of greenhouse gas emissions (“hot spots”) more and more comprehensively going forward. Please see the following sections for further details.
Ensure sustainable consumption and production patterns.
Take urgent action to combat climate change and its impacts.