Zscaler announced this September that it has achieved carbon neutral status for CY 2022 and declared its intention to become a net zero emitter by 2025. The company utilized a combination of renewable energy credits and carbon offset purchases to cancel out its projected electricity consumption and carbon output.
Aside from the very real need to stem emissions that could lead to climate catastrophe, environmental responsibility is a topic of increasing importance among the investment community. According to Gartner, 85% of investors considered a company’s environmental, social, and governance (ESG) efforts before putting their money behind a company in 2020.
That’s why we invited Zscaler SVP, Investor Relations & Strategic Finance Bill Choi to discuss how Zscaler was able to achieve such significant progress, what it means for customers, and how you can encourage leadership within your own organization to take significant steps toward emissions reductions.
First off, how did Zscaler achieve its carbon neutral status?
Choi: We began our carbon reduction journey by striving to reach 100% renewable energy with our data centers and offices. We are building on that progress by exploring additional opportunities to cut emissions in other areas of our business. Once we quantified additional targets including business travel, procurement, and customer and public cloud usage, we purchased carbon offsets to match emissions from those sources.
What exactly is a carbon offset? Is that just a way of passing the buck?
Choi: There are many types of carbon offsets in the market, from tried-and-tested offsets like nature-based solutions (planting trees), community-based (less polluting cook stoves) and industrial-scale (process improvement and gas capture or wind farms) ones, as well as emerging technologies. A carbon offset is created when one metric ton of greenhouse gas is captured, avoided, or destroyed in order to compensate for an equivalent emission made. Zscaler only purchased high-quality carbon offsets that were verified through the Verified Carbon Standard Program managed by Verra, a third-party, and tracked on a public registry.
How was Zscaler able to power more than 150 data centers across six continents using 100% renewable energy while still processing more than 200 billion transactions per day?
Choi: Our inherently efficient architecture is not only the right solution for today’s workplace, but it’s also better for the environment. It is well-established that moving to the cloud in general has a positive environmental impact, but we’ve taken it a step further. Our multi-tenant cloud architecture allows us to further optimize computing resources, which results in a high-density approach that uses less energy per byte processed. While a challenge for our engineers, this approach is ultimately worthwhile because it provides both better performance and a reduced environmental impact. This is something you can achieve when you build a solution from the ground up – the right approach matters.
We prioritized working with data centers powered by renewable energy wherever possible. This helped us reach the 75% renewable energy mark, but there was still room to improve. So we calculated total energy usage from our global data centers and offices and obtained third-party validation of our methodology to determine our total projected non-renewable energy use for CY 2021. We then purchased high-quality renewable energy credits (RECs) from wind and solar projects to match the non-renewable portion to take us to 100% renewable for CY 2021.
Could you explain the difference between carbon neutral and net zero and why is Zscaler striving for the latter?
Choi: Becoming carbon neutral and net zero are both laudable goals companies strive for to reduce their impact on the environment. Carbon neutrality is a stepping stone toward net zero that demonstrates commitment to and progress toward emissions reductions, but being carbon neutral is not a final destination for Zscaler. We have more to do.
The major difference between these two is that reaching net zero means that a company exhausts opportunities to eliminate carbon emissions from the start, rather than seeking to offset them. This requires additional focus, creativity, and investment, especially through examining operations and working with suppliers (and in some cases, end users) to find further opportunities to reduce emissions.
How can working with Zscaler help other companies reduce their environmental impact?
Choi: Zscaler customers can reduce their energy usage and carbon emissions by moving to cloud rather than continuing to power legacy IT systems. Our efficient cloud platform, for instance, eliminates the need for security appliances and the significant amounts of energy and carbon emissions associated with building, powering, cooling, and transporting these appliances. In addition, with Zscaler securely connecting the right user to the right application, our customers can safely accelerate their network and application transformation. This can have an outsized benefit to our customers’ environmental impact, as they quickly migrate applications to the public cloud and eliminate the sizable number of servers, storage, and network hardware in their data centers.
As I mentioned, our approach to cloud-based security also optimizes computing resources, resulting in unprecedented levels of efficiency. Not only are our customers protected against real-time threats no matter where they are working, they’re also benefiting from an innovative and modern architecture that relies on fewer servers and appliances, less rack space, and uses less power and cooling solutions than legacy approaches.
I would encourage anyone interested in learning more about how we can help our customers lower their own emissions to visit our environmental impact webpage.
I’ve heard ESG sort of written off as a vanity metric. Can you explain why it’s more than that to Zscaler?
Choi: ESG matters to Zscaler because it matters to our customers. Cybersecurity is an important ESG topic for the c-suite, company boards, and investors. But Zscaler is about more than just security. We also help organizations be more agile, realize the social benefits of secure hybrid work, and drive additional positive environmental impact by moving applications to the cloud. We obsess over offering a complete solution that anticipates, secures, and simplifies our customers’ needs.
We recognize the responsibility that comes with being an industry leader and are always looking to do things better. From building a product that protects organizations and the communities that our customers serve to minimizing our impact on the planet, we are committed to doing what’s right.
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