Equinix supports the aims of the TCFD to bring transparency around climate risks into financial reporting. Through our work with Accounting for Sustainability (A4S) we are working to embed climate change risk management into our business where possible and appropriate. In 2020, Equinix published an Environmental Sustainability and Global Climate Change Policy detailing our approach and practices related to the environment, climate strategy, resource efficiency and reporting. We believe our current sustainability report aligns well with the TCFD guidance and we intend to refine our strategy and reporting in this framework in the future.
|Describe the board’s oversight of climate-related risks and opportunities.||The head of Equinix’s Governance Committee of the Board of Directors has ultimate responsibility for climate-related risks, to which Equinix’s Sustainability Program Office (SPO) reports periodically, as needed. The board chair is also the head of Equinix’s Sustainability Executive Steering Committee (SteerCo). The Governance Committee of the Board and the board chair are informed of and oversee all material risks to Equinix including climate-related issues and ensure ultimate alignment with the overall business strategy. They receive input from several teams to manage climate-related risks including: the Enterprise Risk Management Team, Government Affairs Team and Sustainability Program Office. Per Equinix’s Governance Committee Charter, the Committee will meet at least three times per year for additional discussions, as needed.|
|Describe management’s role in assessing and managing climate-related risks and opportunities.||Equinix recognizes that the management of climate change must be cross-functional, and given the nature of our business of building, owning and operating data centers, climate-related physical risks (e.g. extreme weather) and transitional risks (e.g. energy pricing) are highly material to the business. To facilitate this goal, we have established a multilayered approach for assessing and managing climate-related risks and opportunities at management level, engaging Equinix’s CEO, CFO, and SPO and other relevant stakeholders such as global operations.|
As the highest-ranking individual in the company and as a member of Equinix’s Sustainability SteerCo and Board of Directors, the CEO reports to the board which ultimately has the remit to manage threats and risks. It is essential that sustainability be included in the CEO’s strategy and responsibilities.
Equinix’s CFO reports to the CEO and is also a member of the Sustainability SteerCo which meets quarterly. As a supporter of the Task Force on Climate-related Financial Disclosure (TCFD), as evidenced by our membership in the U.S. Chapter of Accounting for Sustainability (A4S), the CFO is working to increase the level of transparency around non-financial risk and opportunities and is responsible for reviewing and approving Equinix’s disclosures related to TCFD and other mechanisms beyond our annual Sustainability Report. The CFO also oversees Equinix’s global finances and budget, which have a direct impact on the implementation of climate-related projects.
Equinix’s SPO is led by the VP of Investor Relations and Sustainability. The SPO is responsible for day-to-day leadership and oversight of Equinix’s sustainability strategy including how we are evolving our climate-related strategy. The SPO provides the thought leadership, knowledge and program management to ensure Equinix has the people, programs and systems in place to evolve our climate-related risk management across a range of material topics, and collaborates with other functional areas on topics such as renewable energy, energy efficiency and design standards.
|Describe the climate-related risks and opportunities the organization has identified over the short, medium and long term.||Equinix has identified several climate-related risks and opportunities, including:|
For additional information, review the company’s CDP response questions C2.1a, C2.3, C2.3a, C2.4, and C2.4a.
|Describe the impact of climate-related risks and opportunities on the organization’s business, strategy and financial planning.||Equinix reviews our annual financial planning and business strategy in the face of power prices, our renewable energy goal and the needs of customers, and evolves our strategy and programs as new climate risk and opportunities arise.|
To manage transitional risks and opportunities related to our products and services, Equinix deploys best-in-class data center energy efficiency technologies, innovations and strategies for reducing energy consumption. We also design, build and operate our data centers with high operational standards, and have evolved our operational strategy to focus on renewable energy procurement, underscored by our long-term goal of using 100% renewable energy across our global platform. We have also set ambitious climate-neutral and science-based 2030 targets.
To manage physical risks, our global and site operations teams conduct R&D on the infrastructure changes and process improvements that will be best suited for temperature or climate regimes or extreme weather patterns in different regions. Our mechanical and electrical engineers are constantly looking for new technologies and schemes to drive cost savings and enhance reliability or resiliency.
For additional information, review the company’s CDP response questions C3.1b, C3.1d, and C3.1e.
|Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2-degree Celsius or lower scenario.||Equinix has not yet introduced climate-related scenario analysis into its business strategy due to the rapid organic business growth and global M&A activities of the past several years. The rapid growth of our portfolio has created difficulties in the availability of quantitative data for constructing potential pathways and outcomes. In the next two years, we plan to research a range of models and evaluate the associated risks and opportunities to develop qualitative scenario narratives exploring the potential range of climate change implications.|
|Describe the organization’s processes for identifying and assessing climate-related risks.||Equinix’s Enterprise Risk Management (ERM) and Business Continuity Program (BCP) Teams are responsible for identifying, prioritizing, and evaluating risks and consequences and responding to minimize the impact of climate-related threats and risks and opportunities.|
To identify and assess risks at the corporate level, the ERM team utilizes interviews and/or surveys to identify top risks to the business. Business risks can include climate-related issues around power (upstream availability, reliability, pricing), transition risk (downstream consumer preference, renewable energy policy, technological disruption) and physical risks (earthquakes, hurricanes, floods). The ERM Team creates a risk map based on the results to assess and prioritize the risks after which a risk assessment is created and managed throughout the year.
At the asset (data center) level, natural hazard exposures are identified and considered part of the business case for a site during the selection process. This information is provided to the Design and Construction Team to ensure awareness of issues unique to a particular location and potential design solutions are created to address exposures. The Business Continuity Team then conducts annual threat and risk assessments for each data center, which identify major issues and their impacts and likelihood. This information is presented to the Business Continuity Executive Steering Committee.
For additional information, review the company’s CDP response questions C2.1b, C2.2, and C2.2a.
|Describe the organization’s processes for managing climate-related risks.||Identified climate-related risks are managed by the parties with oversight and responsibility for each risk. A series of internal reports to Equinix’s executives and board of directors are completed to ensure risks are appropriately mitigated, managed and monitored.|
For additional information, review the company’s CDP response questions C2.1b, C2.2, C2.2a, C3.1d, and C3.1e.
|Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.||Strategic, financial, operational and regulatory risks are assessed at the enterprise level through the ERM process. The ERM process includes periodic risk identification through surveys and/or interviews, in-depth assessments of top risks including evaluation of risk mitigation capabilities and then periodic monitoring and reporting back to executives and the board.|
For additional information, review the company’s CDP response questions C2.1b, C2.2, and C2.2a.
|Metrics and Targets:|
|Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.||Equinix defines substantive strategic impact in the context of climate-related risks as impact that is more variable and uncertain over a longer time frame than is typically considered for financial risk. From a quantitative standpoint, Equinix considers both the probability and the severity when assessing the magnitude of a risk. A climate-related risk is defined to be strategically substantive if it has a probability of occurring every two to five years and a severity of affecting 10% of our operating income.|
A site-level risk, including those related to climate change, is substantive if it receives a residual risk score of over 2.0 in an assessment that evaluates and scores for impact, likelihood and severity based on a risk’s potential human (i.e., death and injury), property (i.e., loss and damage) and business (i.e., loss of market share, business interruption) impact. This score requires identification and implementation of potential additional risk mitigation measures which are documented and tracked.
The risks and opportunities managed and/or mitigated by our renewable energy and emissions reduction targets are considered substantive. Our CEO, CFO, SPO and other relevant groups such as certain global operations teams are evaluated on Equinix’s progress on these metrics and related performance such as long-term business value and risk mitigation and increased scores on ESG indices or customer satisfaction, which are then taken into account toward remuneration decisions.
For additional information, review the company’s CDP response questions C1.3a, C2.1b, C2.2, C4.1, C4.1a, C4.1b, C4.2, and C4.2a.
|Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.||GHG emissions are disclosed in the Carbon Reduction section.|
For additional information, review the company’s CDP response questions C6.1, C6.3, and C6.5.
|Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.||Equinix has a 100% renewable energy goal targeting our global operations. This equates to achieving a 100% reduction in Scope 2 market-based emissions originating from electric power over a 2015 base year (766,000 mtCO2e).|
Equinix’s SBT will reduce absolute Scope 1 and 2 emissions by 50% and is driven largely by our progress against our renewable energy goal. Our SBT also addresses Scope 3 in terms of upstream emissions from losses (50% reduction) and supplier emissions from the categories of Purchased Goods and Services and Capital Goods.
We also set a 2030 global climate-neutral goal for Scope 1 and 2.
For additional information, review the company’s CDP response questions C4.1, C4.1a, C4.1b, C4.2, and C4.2a.