Navigating Crossroads - The Confluence of FinOps and Sustainability

Welcome back to the fourth part of my 'Mythbusters' series, where we've been debunking common misconceptions in the Financial Operations (FinOps) space. In this blog, we'll address the myth that "FinOps only impacts the business's financial statement."

The Myth

A restricted view of FinOps often confines its influence to monetary aspects, creating a perception that its impact is limited to the business's financial statement. However, this outlook doesn't capture the multifaceted influence of FinOps, particularly its crossroads with other domains, like sustainability.

The Crossroads: Merging Sustainability with FinOps

FinOps intersects with various other frameworks, creating a holistic and well-rounded approach to managing cloud economics. An exciting and increasingly relevant intersection is with sustainability, giving birth to what we can call 'GreenOps.'

In traditional cloud cost management, the focus is on reducing both 'rate' and 'usage' in the equation 'rate x usage = cloud spend.' But when we talk about carbon emissions, 'usage' becomes the key factor, as the 'rate' won't impact the carbon footprint.

This shift of focus opens new challenges. As per a survey by the FinOps Foundation, the biggest hurdle in cloud cost optimization is "Empowering engineers to take action."

Bridging the Gap: Personalizing the Impact

We can address this challenge by bringing the implications of cloud usage closer to engineers. How about translating monetary savings from optimized cloud usage into reduced carbon emissions? For instance, let's pivot the conversation from "Let's save costs on service X to keep within budget" to "Let's decrease resource usage, saving carbon emissions equivalent to a family of four."

This approach aligns the impact of engineers' actions with their personal sphere, making it more tangible. It's akin to understanding the value of clean air provided by trees - not directly visible but significantly impactful.

Implications: From Business Value to Societal Value

At the organizational level, this shift can create profound changes. The EU has adopted strict reporting requirements for businesses regarding their Environmental, Social, and Governance (ESG) impacts. These guidelines include reporting on Scope 1, 2, and 3 emissions. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting company. Scope 3 includes all other indirect emissions that occur in a company's value chain.

Companies with sustainable practices and transparent reporting could gain a competitive edge in this scenario. With more consumers and employees valuing sustainability, a transparent and environmentally-conscious company becomes more attractive.

Conclusion

FinOps reaches beyond a business's financial statement. By embracing its intersections with other frameworks, such as sustainability, we can enhance our FinOps practice. GreenOps not only optimizes costs but also contributes significantly to reducing carbon emissions. This approach aligns operational efficiency with environmental sustainability, an essential synergy in today's world.

What's Next?

Stay tuned for the next part of the series, where we'll continue to debunk myths surrounding FinOps, exploring its multidimensional impacts on business operations.