SaaS (Software as a Service), increasingly powered by AI, often appears “clean” compared to industries like manufacturing. But this hides a reality: digital services rely on energy-hungry data centers, expanding global supply chains, and escalating e-waste through device demands. AI - now central to SaaS - amplifies these energy demands and poses environmental and health risks due to its massive compute needs.
While sustainability focus has traditionally emphasized manufacturing or logistics, SaaS must also shoulder its climate responsibilities. As software entrenches itself in business and daily life, digital companies need to step into the sustainability conversation.
Despite not producing tangible goods, SaaS companies contribute significantly to global emissions. Here’s how:
Data Centers: The biggest contributor to carbon emissions in SaaS companies comes from cloud computing. According to a 2023 report by the International Energy Agency (IEA), data centers worldwide consumed approximately 460 TWh in 2022, nearly 2 % of global electricity demand. By 2026, consumption may double to over 1,000 TWh, roughly equal to Japan’s total electricity use. The expected surge is largely driven by AI workloads, with demand potentially doubling again by 2030 and data centers accounting for a sizable share of global power growth.
Remote Work Infrastructure: While remote work is often considered an eco-friendly alternative, a 2023 study found that a shift to full-time remote work increases household energy consumption by 20-30% depending on factors like regional climate, appliance efficiency, and heating/cooling needs - offsetting some of the sustainability gains from reduced commuting.
Hardware Dependency & E-Waste: SaaS companies frequently push software updates that require more powerful devices, contributing to global electronic waste. According to the United Nations Global E‑Waste Monitor report, a record 53.6 million metric tonnes of e-waste were generated in 2019 (the most recent year covered), with IT devices - including computers and mobile phones - making up nearly 30% of that total.
Corporate Business Travel: Tech industry events and client meetings contribute to higher carbon emissions. A joint report by Boston Consulting Group and CDP indicates that only 15% of companies have set targets for their Scope 3 emissions (Scope 3 = indirect emissions from a company’s value chain, e.g. travel, commuting, purchased goods/services — often the largest share of its footprint, EPA), which include areas like business travel. This reflects the broader challenge in addressing IT firms' indirect emissions.
A 2023 study by Greenpeace found that only 20% of global SaaS companies have an official carbon reduction policy - yet having a policy does not guarantee meaningful action. Analyses by CDP and Climate Action Tracker show many corporate pledges lack science-based targets, independent verification, or interim milestones, creating the risk of “greenwashing”.
CDP’s 2024 review of over 22,700 companies found that only 2% achieved an 'A' score for transparency and measurable progress. Likewise, the Science Based Targets initiative (SBTi) reports fewer than one in five companies with “net zero” claims have targets aligned with its standards.
For SaaS businesses - whether in Cyprus or Silicon Valley - the challenge is to pair climate pledges with verifiable results. Leaders are showing it can be done by investing in carbon-neutral data centers, cutting software’s energy demands, and designing greener remote work programs. The sector’s next step is clear: move beyond promises to proven, measurable action.
Google remains on a clear trajectory toward sustainability, having matched 100% of its global electricity use with renewable energy for the sixth consecutive year in 2023, and continues pushing toward 24/7 carbon-free energy across its operations. Additionally, Google has deployed AI-powered cooling systems via DeepMind, reducing energy used for data center cooling by up to 40%, exemplifying how AI can drive both digital innovation and efficiency.
Meanwhile, Amazon (including Amazon Web Services) achieved its goal of matching all worldwide electricity consumption with 100% renewable energy in 2023, seven years ahead of schedule, largely through aggressive investments in solar and wind projects across the globe.
While I wasn’t able to find precise examples of Dropbox or Slack subsidizing solar panels or energy-efficient devices, Amazon's leadership provides an instructive alternative. In its sustainability practices, Amazon emphasizes supporting initiatives that allow remote and distributed workforces to utilize carbon-free energy sources like solar and wind. Although specifics about equipment subsidies weren’t publicly disclosed, Amazon’s commitment to powering its operations—including data centers and office spaces—with renewable energy underlines how remote work infrastructure can integrate seamlessly with sustainability goals.
Edge computing presents a clear opportunity to reduce energy consumption. By processing data closer to users, edge architectures reduce the energy-intensive data transfer associated with centralized cloud systems. As highlighted by Impakter, if just 25% of global data center tasks were handled by edge nodes (a conservative scenario), the world could save billions in energy costs annually, while also creating up to 7 million green jobs by 2025.
Researchers have also outlined technical approaches to lower energy footprints in cloud–edge systems, such as workload optimization and immersion cooling systems.
4. Eco-Friendly Corporate Policies
Microsoft has positioned itself as a sustainability leader in tech. As of its 2025 sustainability update, the company remains steadfast in its goal to become carbon negative by 2030 - removing more CO₂ from the atmosphere than it emits - and ultimately plans to offset all emissions since its founding in 1975 by 2050. To support this, Microsoft has invested in numerous carbon removal projects, ranging from nature-based solutions to advanced technologies like Bioenergy with Carbon Capture and Storage and direct air capture.
While global SaaS giants often lead sustainability conversations, Cyprus’s own tech sector is showing how smaller players can make a difference. As an example, a Limassol-based gaming company has committed to achieving carbon neutrality for its Scope 2 emissions by 2030 and is actively reducing waste, collecting over 149 kg of used coffee capsules, 48 kg of batteries, and other recyclable materials in a single year, alongside planting more than 300 trees across its offices in 2023. Other local IT firms have embraced renewable energy by powering offices with solar installations in line with Cyprus’s goal to reach 33% renewable energy use by 2030, while sustainability-minded startups are adopting remote-first policies to cut down on daily commuting and reduce office energy use. These initiatives demonstrate that even smaller tech companies, with the right strategies, can significantly reduce their environmental footprint and contribute to the island’s climate goals.
SaaS businesses hold significant economic and technological power. While their impact is often indirect, they influence global supply chains, workforce behaviors, and data infrastructure. This sector is not a passing trend—it is here to stay, and it continues to grow as digital solutions become indispensable across industries. That makes it all the more critical to ensure these services are built and scaled with sustainability at their core. The sustainability challenge is not just about cutting emissions—it’s about transforming how digital businesses operate so that their inevitable growth aligns with the needs of a climate-conscious future.
Overall, SaaS companies can take meaningful steps to reduce their environmental impact by prioritizing green data centers that run on renewable energy, designing software to be more energy-efficient and therefore less power-hungry, encouraging employees to adopt sustainable practices - such as using energy-saving devices or tapping into incentives for efficient home offices - and investing in climate-focused technologies while working with policymakers to shape effective sustainability regulations.
The tech industry has the resources, influence, and financial power to set sustainability standards. Yet, without proactive change, digital companies will remain silent contributors to climate crises. Being digital does not mean being impact-free. The future of SaaS is not just about innovation - it’s about responsibility.
Ekaterina Korneeva works in the SaaS industry, where she combines their professional expertise with a strong commitment to corporate social responsibility. Outside of work, she actively volunteers with the United Nations and multiple NGOs, continuing their journey of driving positive social and environmental impact.
