Overview of sustainable IT regulations

The law on the Reduction of the Environmental Footprint of Digital Technology (REEN) of November 15, 2021, aims to make all economic players, and particularly local authorities, accountable for the environmental issues related to the digital industry. Its objective is to guarantee the development of sober, responsible, and ecologically virtuous digital technology in France. The REEN law notably provides for:

• The creation of an observatory for the environmental impacts of digital technology, by Ademe, Arcep, and the CSA.
• Limiting the renewal of digital devices: fighting against obsolescence, promoting repair and reconditioning, informing consumers, and taking the repairability index into account in public procurement.
• The development of ecologically virtuous digital uses: creation of a general eco-design framework for digital services, informing consumers about the environmental footprint of online video, etc.
• The promotion of less energy-intensive data centers and networks: strengthening environmental conditions that will apply to the removal of the price shield, and to the reduced rate of the domestic tax on final electricity consumption (TICFE) applicable to data centers. Electronic communications operators will be required to publish key indicators summarizing their commitments to the ecological transition.
• The promotion of a sustainable IT strategy in local territories: from 2025, municipalities and their inter-municipalities with more than 50,000 inhabitants must develop a sustainable IT strategy.

The anti-waste law for a circular economy, known as the AGEC law, was passed on February 10, 2020. The implementation of the repairability index, enacted in this law, was deployed in January 2021 for several types of electrical equipment: smartphones, laptops, televisions, etc. This law pursues several ambitions:

• Informing the consumer about the ease of repair of electrical appliances offered for sale.
• Raising awareness about planned obsolescence.
• Encouraging manufacturers of electronic and electrical devices to design devices that are easier to repair.

This law also includes an obligation to raise consumer awareness, requiring internet service providers (ISPs) and mobile operators to inform consumers of their greenhouse gas emissions related to their internet and mobile consumption. This provision has been effective since January 2022.

The European eco-design directive, known as "Ecodesign," is a European regulation applying to products that consume energy or have an influence on energy consumption. It includes eco-design requirements applicable to servers and any data storage product hosted in a private company's IT rooms. To limit their environmental impact, the directive sets rules related to:

• The presence of substances hindering circularity
• Efficiency in the use of energy and resources
• Recycled material content
• The availability of a functionality for secure data erasure
• The availability of the latest available version of firmware

The objective of the Tertiary Decree of July 23, 2019 (or tertiary eco-energy scheme) is to accelerate regional planning and, above all, to reduce the energy consumption of French tertiary building stocks by at least 40% by 2030, 50% in 2040, and 60% in 2050 compared to the chosen reference year (between 2010 and 2019).

The decree concerns owners or operators of buildings housing tertiary activities (data centers included) in the private or public sector, whose surface area (or cumulative surface area) exceeds 1,000 m². Those concerned are required to create an account and transmit consumption data via the OPERAT platform, managed by Ademe.

The "Absolute Value III" method order specifies the energy consumption reduction targets, expressed in absolute value for new tertiary activities: shops, hotels and tourist rentals, catering, and data centers. It is currently being drafted and should be published soon.

From 2024, a new directive will come into force: the Corporate Sustainability Reporting Directive (CSRD). It will replace the Non-Financial Reporting Directive (NFRD) and will require more than 50,000 companies in Europe to report on the sustainability of their activities.

The Council of the European Union, the European Parliament, and the European Commission have established the following schedule:

• Reporting in 2025 on the 2024 financial year for companies already subject to the Non-Financial Reporting Directive
• Reporting in 2026 on the 2025 financial year for other large companies
• Reporting in 2027 on the 2026 financial year for listed SMEs, with a 2-year opt-out option
• Reporting in 2029 on the 2028 financial year for foreign companies with a European subsidiary

The CSRD determines the information that companies must include each year in their extra-financial reporting. More specifically, it requires them to track and publish, in addition to their financial balance sheet, an ESG (environmental, social, and governance) report, thus giving as much importance to the sustainable dimension as to the economic dimension of their activities.

To refine this list of extra-financial standards, EFRAG (European Financial Reporting Advisory Group) has proposed a number of ESG criteria, including carbon indicators.

Among the information that could be requested:

• The company's greenhouse gas (GHG) emissions assessment
• Monitoring of its direct, indirect, and other GHG emissions (scopes 1, 2, and 3);
• Economic intensity of greenhouse gas emissions, in tonnes of CO2 equivalent per million euros (tCO2e/M€)
• Strategy for reducing impacts on global warming

Companies must now anticipate and prepare for the CSRD by carrying out their carbon footprint assessment.

Decision n° 2022-2149 of the Regulatory Authority for Electronic Communications, Posts and Print Media Distribution (Arcep), dated November 22, 2022, resulted in the implementation of an annual collection of environmental data from electronic communications operators, data centers, and terminal manufacturers (smartphones, computers, connected televisions, etc.).

Arcep's decision aims to:

• Inform citizens, public actors, and all stakeholders about the environmental impacts of the digital sector;
• Identify the activities of economic players likely to have an impact on the environment by building indicators and reporting on their environmental impact;
• Have a follow-up of these indicators over time, allowing for an assessment of the effects of environmental protection actions implemented by companies.

Data center operators located in France, and whose annual turnover in France is equal to or greater than 10 million euros excluding tax, must respond to survey Annex B, which aims to collect the following data:

• The number of data centers and greenhouse gas emissions.
• The following nominative information: name of the data center, the owner and the operator of the data center, the date of commissioning of the data center, and the name of the municipality in which the data center is located.
• The total floor area of each data center, the total floor area intended to house the data center's IT equipment, the maximum permissible electrical power of IT equipment in the data center's IT rooms, the energy and electrical consumption of each data center, the electrical consumption of their IT equipment, their incoming and outgoing water volume according to the type of water (drinking water from the local network or fresh water, sea water, waste water).
• Qualitative information on water discharge conditions and zones as well as on cooling systems.

This process may be repeated in 2024. A public consultation was launched during the summer of 2023.

The Energy Efficiency Directive is a European directive that constitutes one of the elements of the "climate change package." It sets energy efficiency improvement targets at the European level aimed at reducing final energy consumption at the EU level by 11.7% in 2030 compared to the 2030 energy consumption forecasts established in 2020.

Member States will be required to submit an indicative contribution to the achievement of this objective. For France, this implies a reduction of 22 TWh over the 2024-2025 period, 25 TWh over the 2026-2027 period, and 32 TWh over the 2028-2030 period, respectively.

The principle of energy efficiency first must be taken into account as a fundamental principle in all sectors, including data centers. The latter will be bound by an:

• Obligation to use waste heat (unless technically or economically impossible) for any new installation or substantial renovation of a data center with a total power greater than 1 MW.
• Obligation to make information relating to their energy performance (data center floor area, installed power, energy consumption, use of waste heat, etc.) available to the public annually for data centers with a power greater than 500 kW, starting from May 15, 2024.