🌐 Cloudflare's Climate Commitments

Welcome everybody to Impact Week. My guess is probably the few of you watching this is probably not the first Impact Week segment you're watching, but today is climate day, or the day that we're focusing on climate. And we've had, we've had a few announcements, right, Patrick? We've had quite a few announcements. I know we put out six blogs this morning. And I don't know if that was a record, but I'm guessing it's probably pretty close. So we have our climate commitments, which we're here to talk about today, which we put out a blog post on this morning. And then we had, I think, a segment earlier today talking about some of our consumer products that we put out this week, focused on sustainability. So green compute with workers, which helps our customers route traffic to points on our edge network in facilities powered by renewable energy, which is super cool. We have a carbon impact report, which will sort of give our customers an idea of what their footprint on Cloudflare's network is and how they can optimize performance. And then we have a cool new partnership with the Green Web Foundation and Pages. So a lot of cool stuff stacked up on one day. Yeah. And then obviously, we have our, our commitments that we're here to talk about. Man, that's crazy. It sort of feels like people did a whole bunch of work and saved it all for one day. That's how these innovation weeks go, right? Like, it's, we're trying to do as much as we can. Except there's five of them. That's true. That's true. Okay, cool. I know, hold on, I wanted to ask you a question before we get started. Obviously, we have a lot going on today that we can talk about. You have worked on sustainability at Cloudflare, probably as long as anybody in the company led some of our early renewable energy purchases, taking over for our colleague Jess Bailey, who I think did the first one. But tell me about, I'm curious what those first conversations were like. You're on the infrastructure team, we're thinking about moving to renewable energy, sort of what, what was that, set the stage for me? Man, it's actually, it's, it's, it was really interesting. I had, you know, I, similar to you, Patrick, I had, I'd worked in like the energy and climate world in, in the policy world for a little bit. Yep. And you were in DC, right? Yeah, yeah. So some of the people I knew from that world had gone, you know, after the, the 2016 catastrophe, and some even before, just to take a break from politics, had gone into, you know, various private sector roles, and there were many opportunities in tech. And so some of them had joined tech companies to, and because of their background in energy and sustainability stuff, they'd sort of fallen into or been shoehorned into that role. And so I had this vague impression of what they did, like, I knew a couple people at Google, but I didn't really know, like, sort of the day to day nuts and bolts. And, and when Nitin came to, to Jess and me... So Nitin Rao, our head of infrastructure. Yes, sorry. Thank you. He, he sort of, he challenged us to level up the ambition that year. This was in 2018. The methodology had already begun just so... So he wanted you to level up, not just on building the network, your full-time job, but on the sustainability in particular. Yeah, this was exactly, this was a total side project, which was pretty common at that time. At that time, the infrastructure team was, I think, I'm pretty sure I'm not exaggerating. I think it was 10 people globally, including London, Singapore, and Austin and San Francisco. It was... What is it? What is it today? I think it's like 72 or 75. And with much more specialization, you know, then people literally did like four things. Like they originated deals, they figured out how to scope them and plan them. They like, they like, literally negotiated with like shipping vendors. And then once the stuff got there, they, they corresponded with the people on site to tell them how to install it. It was like, it was hilarious. That's great. We'll talk about learning the whole supply chain. Anyway, I interrupted, you were talking about leveling up sustainability. No, no, it's a, it's all part and parcel, actually. So at the time, total side project, like it wasn't even, there was not even like additional time set aside for this. It was like, you know, you got to do this. And then also, this is a request, you know, for Matthew, from our CEO to do this. Matthew had sort of recently become aware that, that, you know, we had some footprint and wanted to figure out what we could do about it. And so what we did that year was, we had sort of a pretty good accounting of our North American operations, our North American network. And actually just going through the process, which I think you now know, like, in maybe even more detail than I do, Patrick, just because you've done such a comprehensive job the last year. But the task at that time was, the first thing to do was to do a proper comprehensive accounting of all our energies. And it turned out, and so that's the reason I mentioned my friends at other tech companies. I sort of, like, in the process of going through that, I'd sit down with our hardware team and the people whose job it was to maintain our repository of all of our equipment. And I'd be like, I'm really sorry to bother you with this, but like, can, even if you don't have this all in one place, I have to get it all in one place. Can you please help me, like, understand what all our equipment is, how much power it uses, and what its disposition is. Is it still there? And, you know, because we didn't have, there wasn't a really central burning operational need for that before. We could get by with the things we needed to do for our network without that central repository. And so I was the first, that need of actually doing our energy accounting was one of the first sort of, like, demands for it. It's not the only one. I think probably there are many other uses for it. And I think the team is much more organized and structured with the tools now, but at that time they didn't need it. And so it hadn't been built yet. Right. And so the reason that I mentioned my friends at other tech companies is I imagined that, like, my friends who worked on sustainability didn't actually have to go and build a database for all the equipment. And I was like, I was sort of envious that, like, they had that built, whereas I had to figure out how to build it. That's actually cool though, because, I mean, once you, when you set up sort of an accounting system in an analog way, when I came, you know, when I started to work on this, probably around this time last year with you, Liam Reese was also on our infrastructure team, you all had sort of done the work. We were getting sort of, we could do energy pulls from all of our pops all over the world, pull that data in, put it into what would become sort of our carbon emissions calculation tool. But that was already done. So I didn't see sort of the, you have sort of a granular understanding of every step along the process, which I think is actually really important because one of the most important things in doing any of this kind of accounting is collecting the initial data. Right. Like we sort of, we have, we'll talk about this later, but we have standards and from IEA and US EPA that give us our emissions factors. And so we could convert to carbon. But if you don't have the right data to start with, then you're sort of playing catching, right? Like you can't actually get to the actual number, which, you know, is one thing for a corporate accounting, like it's important to be, but it's also, you know, like we're actually trying to have an impact on the environment, right? Like this is about carbon emissions. This is about reducing emissions associated with an energy grid. So if you're actually not getting accurate data, none of the rest of that sort of fits into place. So I'm actually envious of you that you saw it before it existed, because then you always have that confidence that yes, I know where each of these numbers came from. That was easier for me because the data was already there and we just took it and applied it in, you know, a calculation that a sixth grader could do in terms of math, which is good for me. But, and it's complicated. We'll get into that because we are so many places all over the world, but it's a long way of saying the hard work was done and I appreciate it. It was, it was really interesting. I didn't do it either, by the way. I mean, I guess maybe I did some of the guiding and administration of that, but Liam, like you said, was a, was a, just a kid as a machine. So the people who, who, who managed those data sources before, I think, you know, not totally unfairly viewed my request as something that's like sort of not their job. They had so many other things to deliver on. This was like another thing that like, well, especially a team of 10 building a network at that pace. Yeah. So like when it's just, it's a treat to have people like, like Liam come in and both be incredibly analytically competent, but also have a certain like clear, clean aesthetic. It just makes everything so much nicer, you know, just like put them to put this mess into a structured clean. Yeah. That, that I actually, I'm really, I guess I'm really happy with where it's ended up now. That's great to have that. I remember our first meeting with Liam. You were like, I think we have sort of a system automated where we're now getting energy on a regular basis, getting readings from all of our metals all over the world. And sure enough, it was a short meeting. And the next day he had sort of populated a spreadsheet. He was like, here's everything we got. Here's what it's pulling. It was amazing. I was like, I didn't know what to ask for that, but yeah, he, it was, he turned it around almost immediately. It's great. I know it's funny. It actually, it is. I mean, this is, go ahead. Well, I was just going to say like having seen it from the beginning, and then obviously we wrote, I was going to move this forward. So if you want to jump back, feel free, but having seen it come to fruition today, that Cloudflare as a company is committed to renewable energy moving forward in perpetuity. I got to imagine that feels pretty good from where it started. No. Yeah. Yeah. Uh, it's funny. If you ask me just like my, my pure sensation, my, my emotional feeling, um, I don't feel markedly different today than I did in the past because in the past, even though we didn't make that explicit announcement. I always felt like, even though we didn't say in our announcement publicly that we're committing that we're not just, we didn't just, you know, um, achieve a hundred percent renewable energy matching this year, but that we're going to do it forever. I sort of knew anyways, from Nitin and from Matthew, uh, that that's what they intended. So, but, you know, that's, that's from an internal perspective from X startup, I'd put my hat on just like all of our customers who've been asking for this and, you know, other interested stakeholders who, you know, might see Cloudflare as sort of a growing presence and they might want assurance. Like, I think I would feel good from that perspective that like, you know, this is nice. This is something that Cloudflare didn't just do for a year or two, but they're, they're on paper. They're going to do this forever. Yeah, I agree. I think I now see, uh, in our sales teams talks to our customers on a regular basis, obviously. And, uh, people are starting to look for that. They're starting to look for, uh, solutions within their supply chain that are powered by renewable energy, uh, that are making an effort to account for their emissions footprint. Because particularly larger companies, they're making their own commitments, right? And as you know, how all the accounting is done under what's called the greenhouse gas protocol, uh, those large companies that have set emissions reduction targets. It matters for achieving those goals, what kinds of companies they have in their supply chain. So they're starting to ask companies, you know, do you purchase renewable energy? Do you do carbon offsets? Do you do carbon removals, et cetera, et cetera. Um, so I actually think, you know, on that side of the customer facing side, I think you're right. I think that's probably the most significant part of the announcement is that just sort of, yes, we've, we've done this in the past. We've demonstrated, uh, that we can do it, that we're accountable. But also, you know, if you come to Cloudflare, you can be assured that this is what we're going to do. Yep. Yeah. You know, and I I've gotten some of those questions internally, I think maybe just because we haven't had that much external documentation and people see my name on the, on our last big announcement from 2019. Um, and so they, they just asked me about these things and, um, and part of my reaction is sometimes like, yeah, of course, of course we're doing that. But then I realized that, you know, we actually didn't get to make an announcement last year because of the complete, you know, the vortex of craziness of the pandemic and the uncertainty that that created right around Earth Day when we had historically made those announcements. And so we, um, uh, there were just, there was a lot else going on. We, we actually still honored our commitment. We just didn't publicly say anything about it. Right. Um, so, uh, I'm really glad that, that we're having the, you know, documenting and putting out there this level of certainty and commitment to people so they know. I think that plus our emissions report, uh, all that will, the plan is for that to flow into our, uh, this is Cloudflare's first, uh, impact week, but we're also planning our first sustainability report at the end of the year. All that information will now flow into one place where I think customers and investors and shareholders who are interested can access it. I think that will be a big help because that was, you know, I worked on, I know today's about sustainability, but for impact week generally, whether it was human rights or, uh, accessibility on the Internet or giving back to the Internet. As we, as the policy team was sort of trying to organize all these things into a week, it was evident how much, uh, like the work that the infrastructure team had done on renewable energy was already happening, right. It was already happening organically inside the company, but we hadn't sort of accumulated it in one place and sort of made sure that it's easily accessible for customers who may be interested for our users, for users who may be interested. And so I think that probably was one of the biggest values of impact week, in a sense, is that organizing it, putting it in one place, making it accessible, and then building on sort of what we've done before and taking it to the next level. Cause once you have it all together, then you can sort of innovate, right? Like then, then everybody sort of sees the whole field and come up and can help contribute to moving forward. At least that's what I felt. Well, I think you're a hundred percent, more than a hundred percent, right? I'm, you probably get more of these questions now because you're, because at least people know that I'm, I'm not the only one to go to on this, but I think you're totally right that, um, it's so nice to have everything in one place to have all this collection of commitments and information. I mean, that's, that is the bulk of questions that I get internally from either sales or, or other, you know, investors or whatever. Um, the, so, so it's so helpful to, um, I'm, I'm really glad that you guys were able to, to put this together and it's like, oh my gosh, it's, it's, uh, in some ways it's funny because it doesn't seem as hard, you know, I can tell you, you sort of, that that's the way that you frame it. But when you get an organization that's doing so many things, that's putting out products at a pace, you know, unbelievable amount of new services per quarter, um, that, that work of, of just being able to know, navigate, group things together and, and, uh, and. You know, just, just being able to not just us internally. I think internally we have pretty good versions of that, but everybody externally who wants to know these things, it's just so nice for them to be able to be organized. Yeah. I, the, the one that sticks out in my mind, and we're going to get back to sustainability because that's the point of this segment, but the one that sticks out was data privacy. I mean, everything that Cloudflare has done through its history to either advance privacy protocols or services or products, it was almost sort of a never ending bucket of small, meaningful advances that accumulated over time. It was hard to sort of capture them all and put them all on the website. Anyway, we tried to do that. And, uh, if you're interested in some of those other topics we talked about, uh, they're on Cloudflare.com slash impact. There's also for everything we're doing this week, which we sort of alluded to at the beginning, that's all on the impact week page, which is just specifically this week. So new initiatives, um, but both of those are there if you want to take a look at them. So, uh, the two commitments for today, we talked about one of them, um, a hundred percent renewable energy building on work that we've done, uh, for a number of years, we made the forward looking commitment. The other one is our historic emissions, um, prior to, uh, when we started purchasing renewable energy, obviously, uh, our network had an emissions footprint associated with the energy that we use to power it. Uh, we got approval and candidly direction from Matthew, uh, that we need to be accountable for that footprint as well. Matthew, our CEO, as you mentioned. So we're now, uh, going through the process of looking back at those records, almost doing what you did sort of in the beginning, but, you know, back in time prior to that initial date, when you started pulling that information in together, uh, to look at our footprint, to look at our consumption. We actually, fortunately, we, uh, and we can talk about this later, but for our carbon emissions calculations, which also came out today. We use, uh, emissions factors from an organization called IEA, uh, which is what's required under the greenhouse gas protocol. It's one of the acceptable emission standards, but they actually have historic emissions also and broken down sort of every country around the world. So that will, so that I'm encouraged by that because as we sort of get our usage rates predating, when we started purchasing renewable energy back to when we launched in 2010. We can then sort of use those point in time emissions factors to actually get hopefully a pretty accurate score of sort of what our footprint was over those years. And I know that we're looking at, um, since we have that data, I think beginning in 2021, we're going to start to make our first, uh, carbon removal, carbon offset purchases to account for that data. And the distinction there for folks who are interested, um, we're defining sort of carbon removal as those subset of carbon offsets that are consistent with net zero commitments. So it's a particular type of offset that I couldn't relay all the criteria off the top of my head. But I think that was an important part of what we're trying to do, trying to do too, being selective about how we mitigate our historical footprint. So, um, that is part of the announcement today. Uh, there's more about that in the blog that Michael and I put out, uh, today, but we'll, we'll certainly keep everybody updated as we get more information on, on those statistics. And, and as I said, sort of mentioned in the post is like, we'll start to do the fun part about how to actually look at removals and offsets. And I'm looking forward to that piece. Yeah, that's going to be very interesting. Apparently, um, apparently folks like Stripe thinks it's very fun because they have a, they have a whole dedicated team, not just to procuring it, but to exploring, um, you know, potential new sources of it that are, that are novel, that are. That's pretty interesting. Commercialized. Yeah. I saw they have like an advisory council, which I thought was really interesting because I know they're, they're really leading into sort of the emerging tech. Seems like that's sort of, that's where they want to put their resources, which is, which is super interesting. I like reading those posts because they're things, you know, it's always interesting to see what people are, people are working on. Totally. It, it, um, I say this in the least denigrating way possible, but it just strikes me as like the most millennial approach to climate. Like, you know, people, everybody else will take care of sort of the nuts and bolts, bread and butter. We're going to like make an investment into, we're not even going to do any of that. We're just going to like look at a moonshot and if it works, that'll be an amazing contribution. And it's. Somebody has, somebody has to hit home runs, Michael. Someone on the team has to hit home runs. There's room for everybody. It's, it's, it actually is. Right. It's kind of cool because it's like. Yeah. Um, if the, if the tech world is a baseball team, there was like, there wasn't really anybody stepping up being like, I'm going to be Mark McGuire. Wow. I'm clearly dating myself. Is that a dated record, Michael? That's hard to tell. I don't, I don't know, actually. I just remember that one season where he and, um, I think it was Ken Griffey Jr. We're just like going home run for home run, like neck and neck. Actually, I don't know. I don't, I can't remember if it was Ken Griffey or Barry Bonds, but that was a fun season. It wasn't. Um, no, I think it is. It's actually an interesting approach because you think about, um, some of the larger companies like Google and Salesforce, et cetera, you know, they have climate initiatives where they're using sort of the philanthropic arm of the company to do what you're talking about as part of their portfolio of climate investments. But for somebody like Stripe, it's sort of, obviously not as big as Google. I don't, I don't think that's a big surprise, but to sort of, I think it actually is pretty cool that they're, you know, they have a certain amount of investment, um, and they're sort of leveraging, uh, cause they're paying, you know, some of the prices on those early tech, uh, prototypes, you know, they're paying a thousand dollars a metric ton for an offset because it's with the hope that it produces more in the future. So yeah, you're right. I mean, I do think it is really cool because, you know, for a growing company with a limited investment, they really are shooting for the moon. It's just, it's just fun to watch. I love reading their posts. Totally. And I, and, you know, I, uh, I say this also not in any sort of negative way, but it just sort of a realistic way. Uh, I doubt that they're, that their investments will be the sort of will be widely used will be any more than, and my guess is that they recognize that too, just in terms of sort of the VC model that they don't, they don't believe any individual member of their portfolio is going to be the unicorn that, that, that pays for the entire portfolio 10 years from now. But they sort of just, they, they're, they, they're comfortable with that risk. They understand that, that portfolio model. Well, and it's cool because, right. Because like, I know as you know, uh, world economic forum has their 1 trillion trees initiative. A lot of companies are participating in it. Planning trees is well-established. It's quantifiable. It's, it can be done on a schedule. Uh, but you need sort of the other half of it too, right. You need sort of the, every, you know, we talk about, we started our whole conversation talking about energy today, because as you know, uh, two thirds of greenhouse gas emissions as a result of energy production, is that right? Yeah. According to IEA. So, uh, it's important for, I actually just lost my train of thought. I was going to make a larger point about why we were focusing in on, on energy and offsets in particular, but I'll be candid. I totally lost my train of thought. Maybe just the, the portfolio of carbon removal being, you know, if I, I'm not sure if this is where you were going, but, but, um, you know, most folks believe that some level, some meaningful amount, not just like, you know, a half a percent or a percent of the world's global emissions, um, of carbon removal is going to be required to meet global, global, you know, carbon emissions goals. Only because, well, yeah, only because the trajectory of actual energy related emissions is not, there's, it's very difficult to foresee a scenario where, where that trajectory ramps down fast enough to meet our goals. So, so we sort of, obviously the world has to do it as quickly as it can, but assuming that it's not going to go quite as quickly, the perception is that we're going to need some carbon removal at some point. And so, you know, if, if, you know, tree planning or whatever, or honestly, probably not so much the planning, but the protecting of the trees, if they're not cut down and burned 20 years later, that can contribute to, you know, to that share of carbon removal, but we're going to need them. Then we need another element in the portfolio. Yeah, that's exactly what I was going to say. That removal is going to hit it completely on the head. Thank you for doing that. Removal has to be part of the equation. Even if we decarbonize our electrical grid, which is a substantial part of carbon emissions, we're going to have to remove, find a way to capture and remove, et cetera. Some of the carbon that's already there sort of get back to the Paris climate accords targets. So yeah, that was exactly right. So we have about three minutes left in our segment. This is what I, this is really what I wanted to ask you because, so I'm on the policy team attorney by training. So I'm, you know, most comfortable in the standards and how we do the accounting, et cetera. You've obviously grown up on the infrastructure team with a mind to sustainability and energy. So we've reached sort of a moment in history for Cloudflare where we made our climate commitments. We're doing more on the efficiency side. I think sustainability is going to be a big part of where Cloudflare is going in the infrastructure in the future. I'm curious what it sort of, what do you think about when it's sort of the next couple of years on Cloudflare infrastructure in terms of sustainability, is it sort of efficiency? Is it product driven? Like, what do you, what do you have sort of floating in the back of your mind, given all the work you've done? I don't think it's just because you just primed my mind for that, but I do think that efficiency is like possibly the biggest thing for us. Our computing and like network utilization footprint is going to grow like gangbusters, which is just a reflection of the fact that people find us useful and want to use us. That's why our utilization is going to grow. But that doesn't mean that it's baked in, that our energy footprint or our carbon footprint grows. Because as much of that increased utilization as we can essentially fund with more efficient servers and workloads and tools, in the most extreme scenario, we could actually not even increase our energy footprint at all, even as more and more people use our network. We probably won't quite achieve that. But that's exactly what we're trying to do. That's our gold standard. That's our North Star. I think you even mentioned that the head of my team, Nitin, is speaking to, I think maybe someone with ARM or one of the processors in- ARM and Ampere. I think he has two segments this afternoon sort of talking about efficiency. Yeah. I'm excited to watch this. So that feels like the biggest opportunity in the short term. And then in the longer term, my guess is that once our footprint goes really big, there's a chance we might go get a small wind farm or a piece of a wind farm somewhere. But that's for the future. I think that would be very exciting. Something I hope we're talking more about in the near term. So we have 10 seconds left. So I'll just say it was a pleasure chatting with you and writing the blog together. And stay tuned for Nitin has some interesting stuff coming up this afternoon. Thanks, Patrick. This is fun.