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Equinix 2022 Green Milestones Lead The Way For Data-Center Sustainability

Updated: Sep 15, 2023

Equinix Headquarters

Named after their company focus, EQUality, Neutrality and Internet eXchange - Equinix, is the world's largest data-center landlord. As a real estate investment trust (REIT), they own and operate more than 240 data-centers around the globe serving in excess of 10,000 customers, of which almost 30% are in the Fortune 500. All of this makes them the clear leader in the data-center space. That formidable business prowess is also matched by the company’s sustainability efforts. Their 2022 Sustainability Report is a highlight reel of their leadership in the areas of Environment, Social and Governance (ESG), but it’s their approach to scope 2 emissions reduction by sourcing renewable energy that really catches the eye. The report details the company's carbon reduction achievements led by significantly increasing its renewable energy utilization through PPAs/VPPAs, supplier sourced renewables, grid direct renewables and renewable energy certificates (RECs).

The Equinix approach is called Future First, and the strategy is focused on three things: driving emissions reductions across their global operations and value chain to achieve science-based and climate-neutral targets; scaling renewable energy purchasing to reach 100% renewable by 2030; and designing the sustainable data-center of the future by investing in innovation. Core principles of the strategy include a high degree of transparency when communicating their sustainability performance, and a desire to employ a collaborative, customer centric, focus that allows Equinix to establish, set and achieve ambitious sustainability targets. These two principles show up in two ways. The company keeps a live web page listing each data-center’s location on a map allowing anyone to see the center’s address, building certifications and both the source and amount of renewable energy coverage. The company takes this a step further with the Equinix Green Power Report, a renewable energy attestation statement based on the principles of The Greenhouse Gas (GHG) Protocol that equips customers with electricity consumption, renewable energy coverage, and carbon footprint data needed to measure and report relevant metrics in pursuit of their own goals and targets. (Moody’s Corporation views the report as a tool that helps them meet their own net-zero goals, while working to create a more sustainable future.)

Charles Meyers, CEO

With Future First as the guiding principle, Equinix takes its transparent, customer centric approach and aims it towards their operations. “Renewable energy is top of mind” for the company, Charles Meyers, CEO said, “in part because environmental sustainability helps attract customers and talent.” This means that the company’s potential energy sources for its power-hungry data-centers are a critical point of emphasis. “As one of the largest users of power on the planet, we have a responsibility…to have a sustainability strategy.”

Jennifer Ruch, Director of Sustainability - Oracle, Former Sr. Director of Sustainability - Equinix

Former Sr. Director of Sustainability, Jennifer Ruch, crystalised the Equinix perspective noting in 2019 that “expanding the use of clean energy for data-center operations is essential to moving the industry towards carbon neutrality.” (Ruch has since left to run sustainability at Oracle, a customer of Equinix, working to help them meet their goal to be 100% renewable by 2025.)

Christopher Wellise, VP - Global Sustainability

Implementation of that perspective shows up in the results. Christopher Wellise, Equinix VP of Global Sustainability, said “we call our strategy Future First because we believe true sustainability requires us to always keep looking forward. For this reason, the report also highlights some areas where there’s still work left to be done. In 2022, we were once again an industry leader in this regard. We achieved 96% renewable energy coverage across our global operations, the furthest progress we’ve made to date toward our goal of 100% renewable energy coverage by 2030. This makes 2022 the fifth consecutive year we’ve achieved greater than 90% renewable energy coverage. It also represents a year-over-year increase of about 10% in terms of total investments in renewables.” According to the current SVP of Corporate Finance and Sustainability, Katrina Rymill, Equinix was the “first in the industry to set a 100% renewable energy goal in 2015 and deploy renewable energy buying concepts​ like Virtual Power Purchase Agreements (VPPAs), which contribute directly to greening the grid.”

Katrina Rymill, SVP, Corporate Finance & Sustainability

Along with VPPAs, RECs remain an important asset in the company’s renewable sourcing arsenal. Recently, Bruce Frandsen, Director, Global Renewable Energy and Cleantech, described the company’s four part sourcing strategy: first - utilize renewable and low-carbon energy; second - secure local sources of renewable energy where possible; third - seek new or recently built generation sources; and fourth - advocate for favorable renewable energy policies and consider renewable energy availability when locating new data-centers. As a result, Equininx emphasizes RECs tied (bundled) to an underlying project such as a virtual Power Purchase Agreement (VPPA) or are included in our power supply contracts (bundled), but RECs from 3rd party (unbundled) sources are a current part of the portfolio mix. He acknowledges that unbundled RECs “do not drive the same incremental additionality as VPPAs with new projects, but the company believes purchasing unbundled RECs plays an important role in sending demand signals to the market.”

Bruce Frandsen, Dir. Global Renewable Energy & Cleantech

More importantly, he noted that while RECs may not be perfect, using them is better than doing nothing particularly when challenges around location and pricing present obstacles. “Using unbundled RECs supports the broader renewable energy industry and greening the grid where we operate and beyond for all users.” Particularly when Equinix can prioritize purchasing RECs “from projects that are less than five years old which helps incentivize the development of additional new projects.”

The Potential Impact of RECs with Additionality

To complement their strategy and ease some of the complexity, Equinix's progress could be further improved if the company included RECs with additionality in their approach. RECs with additionality are not only relevant and critical, but they provide several benefits.

First, RECs with additionality will increase Equinix’s environmental impact as they continue to use unbundled RECs to supplement their portfolio based sourcing strategy. While Equinix currently seeks to buy unbundled RECs from projects that are less than 5 years old, RECs with additionality would directly support new renewable energy projects prior to their Commercial Operation Date (COD). Thus, helping to expedite and velocity to the grid’s transition to renewable energy. These RECs would also provide a crucial element currently absent in the unbundled REC model, allowing Equinix to demonstrate a direct contribution to new renewable energy projects, and bolster its sustainability claims and efforts.

Secondly, opting for RECs with additionality will add scalability to Equinix's approach. VPPAs involve significant complexities and uncertainties. A VPPA is a huge undertaking requiring expert negotiating skills, risk mitigation in the electricity market, and a massive effort to engage stakeholders. Not to mention dealing with the lack of clarity as to whether it will cover your future electricity consumption. In contrast, RECs with additionality offer a seamless procurement process without the challenges associated with a VPPA, providing a flexible solution to address future electricity consumption.

Lastly, RECs with additionality would also support Equinix’s Future First principles of transparency and customer centricity. These RECs would be easy to procure at the parent company level and then assigned and allocated to specific data-center locations. Equinox could also include the RECs with additionality in their Green Power Reports for customers so they could use them in their own sustainability strategies and reporting.

In the end, Equinix is to be commended for its progress in sourcing nearly 100% renewable electricity. But by incorporating RECs with additionality, the company could further enhance its environmental impact, strengthen its goals to accelerate the transition to renewable energy, and add scale and simplicity to its journey to 100% clean energy.


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