How a HSBC data center in Hong Kong has figured out a smart way to cut carbon emissions

HSBC has installed solar panels to its data center facility in Hong Kong as part of its strategy to reduce carbon emissions.

The Multinational financial giant has installed 750 solar panels in HSBC’s data center in Tseung Kwan O, southeast from Hong Kong’s Central District. They are designed to generate about 221,000 Kilowatt hours (kWh) of electricity, enough to power 54 homes, HSBC said.

The panels, spanning 2,300 square meters on the data center’s rooftop, will also be able to generate revenue for HSBC via a feed-in tariff.

“Businesses can play a key role in tackling climate change, including the decisions we make about our premises. We look forward to replicating this success in Tseung Kwan O across our facilities in Hong Kong,” said Luanne Lim, Chief Operating Officer of HSBC Hong Kong.

This installation is expected to cut 108,000 kg worth of carbon for HSBC, which will help with the company’s plan to achieve 100 percent renewable electricity by 2030.

These developments come in the backdrop of increasing pressure to adopt renewable energy, to reduce carbon emissions and combat climate change issues. Almost a year back, Goldman Sachs has ruled out direct finance for new or expanding thermal coal mines and coal-fired power plant projects worldwide, as well as direct finance for new Arctic oil exploration and production. While other major U.S. banks have committed to reducing credit exposure to coal mining, their approach restricts only lending, ignoring the large amounts of capital the banks facilitate for the coal industry from the underwriting of issuances of stocks and bonds.

Activists have been vehement in their criticism of global financial institutions, which they say are turning a blind eye and undermining the Paris Agreement when it comes to phasing out coal-based energy production.

According to a research by non profit organisations like Urgewald, BankTrack and 30 others, banks and other financial institutions from January 2017 to September 2019, they have provided lending finance and underwriting services to 258 coal plant developers in the world. According to Heffa Schuecking, director of Urgewald, this has amounted to channeling $745 billion.

Jason Opeña Disterhoft, Climate and Energy Senior Campaigner at Rainforest Action Network (RAN), said that Goldman Sachs’s updated policy shows that U.S. banks can draw red lines on oil and gas, and now other major U.S. banks, especially JPMorgan Chase –– the world’s worst banker of fossil fuels by a wide margin –– must improve on what Goldman has done.

“The writing was already on the wall for coal financing. Goldman Sachs’s new policy puts that writing in flashing neon,” he pointed out.

Goldman Sachs banks on data centers with $500 million investment in Global Compute

Goldman Sachs is betting on data centers with a US$500 million investment in Global Compute Infrastructure.

The Goldman Sachs Merchant Banking Division announced a partnership with former chief investment officer at Digital Realty, Scott Peterson, to form the newly established global data center infrastructure platform.

“Goldman Sachs is the perfect partner for us as we pursue global investment opportunities in the data infrastructure space,” according to Scott Peterson, the CEO of Global Compute.

Goldman Sachs’ investment primarily comes from its infrastructure fund, West Street Infrastructure Partners III, to enable up to US$1.5 billion in near-term investments in data centers deployed across North America, Europe, Asia Pacific and Latin America.

“Our combined global pedigrees and networks, together with GS MBD’s access to ample growth capital, will allow the Global Compute platform to not only serve the critical needs of our customers around the world, but also create and unlock value for our partners,” said Mr. Peterson.

Global Compute intends to grow through a combination of acquisitions and organic development to serve customers in geographies with strong secular tailwinds and potential for significant data infrastructure growth.

Leveraging the experience and track record of the management team, Global Compute will focus on acquiring and developing facilities which can meet the growing compute, storage, connectivity and colocation deployment needs of the world’s largest technology companies.

Aligned with this strategy, Global Compute signed an agreement to acquire ATM S.A., a leading data center and communications infrastructure business in Poland.

“Our initial investment in ATM S.A. is an ideal illustration of this collaboration. We are extremely enthusiastic about our partnership with Goldman Sachs enabling us to provide creative solutions for our global customers,” said Mr. Peterson.

Headquartered in Warsaw, ATM’s world class data center assets, communication infrastructure footprint, customer base and strong reputation in the market provide Global Compute with an attractive entry point into the rapidly growing Central and Eastern European data center market.

“There’s so much capital chasing deals, but based on the breadth of our track record, we believe we can find, evaluate and underwrite transactions as well as serve the critical needs of our customers,” Peterson said in an interview.

Global Compute intends to build on ATM’s success and market leadership by positioning the company to service the growing deployment needs of both new and existing customers in Poland and the broader CEE region.

“We see a tremendous opportunity in the data center space driven by increasing computing and storage demand and we believe the Global Compute team, backed by the global resources of Goldman Sachs, is uniquely positioned to deliver world class solutions to meet that demand,” said Leonard Seevers, the Managing Director at Goldman Sachs.

The founding Global Compute management team is led by Scott Peterson, the former CIO and co-founder of Digital Realty, with over 18 years of data center industry experience and more than 30 years in the real estate investment arena.

During his tenure at Digital Realty from 2004 to 2018, Mr. Peterson led all investment activity and was responsible for US$17 billion in total deal volume across both M&A and organic development.

Mr. Peterson is joined by a number of established executives in the data center space, including:

  • Fellow Digital Realty co-founder, Christopher Kenney as COO
  • Former Senior Digital Realty Executive in EMEA, Stephen Taylor as Head of Europe

“We think the industry has tremendous tailwinds amid continued penetration of cloud service providers,” Scott Lebovitz, Global co-Head and co-CIO of Goldman’s infrastructure investment group, said in an interview.

Following the Global Compute investment, Goldman Sachs’ third infrastructure fund valued at $2.5 billion is now more than 70% deployed. 

The firm is preparing to raise a fourth fund, likely dubbed West Street Global Infrastructure Partners IV, early next year, according to people with knowledge of the matter.

This isn’t the first time Goldman Sachs has invested in data centers, as its special situations arm previously had a stake in AirTrunk, which it sold earlier this year to Macquarie Group for US$3 billion.

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Stuart Crowley

Editor, W.Media