FINANCIAL CENTRE FRANKFURT: ESG, digital infrastructure, innovation & „Frankfurt ecosystem“ (Michael Jakobi, contagi Digital Impact Group)

Europe in general and Germany, in particular, are not taking the easy way out when it comes to shaping a sustainable future. As generally accepted as the UN’s sustainability goals are, as much as the words Ecological – Social – Governance (ESG for short) are on everyone’s lips, the attitudes and actions on how these are to be achieved diverge.

In Germany in particular, there is an immense will to fulfill the goals set in all areas and in the best possible way – technical progress should be egalitarian, democratic, and in line with data protection; the energy turnaround should protect the environment without jeopardizing economic growth. We are trying to solve and overcome the conflicting goals and limits that we inevitably come up against with a great deal of (technical) expertise and even more capital investment.

In the area of digitization and its underlying infrastructure, the ambivalence becomes even clearer. On the one hand, this is a key building block for ESG: be it the replacement of the business trip by a virtual meeting, online access for educational purposes in the countryside, or information on the actions of public authorities freely available on the Internet – to name just three examples. On the other hand, digitization consumes large amounts of resources, be it electricity for data centers or rare-earth for batteries and devices. It also sets new hurdles in social and professional participation and is subject to criticism due to data collection and analysis, especially by (American) large corporations.

Unfortunately, the „solution“ to this tension often amounts to stagnation – regulatory requirements alienate investors, NIMBY (Not in my Backyard) protests prevent or delay critical projects, and processes are not digitized „for data protection reasons. The fact that this ultimately helps neither the climate nor society seems to be of secondary importance.

In Frankfurt, a city that has evolved from a banking capital to the data capital of the EU, the challenge is evident in practice: despite the unquestionable availability of capital, expertise, and infrastructure, the city on the Main is neither at the smart city level (Hamburg) nor among the top startups (Berlin/Rhein-Ruhr/Munich) in Germany, let alone in Europe. The city also struggles with its role as the (world’s largest) Internet hub and important data center location – difficult energy supply, unused waste heat, displaced businesses – to name just a few points of criticism.

Michael Jakobi, contagi Digital Impact Group
Michael Jakobi, contagi Digital Impact Group

The new governing coalition in the city parliament is striving to remedy the situation with a digitization strategy on the one hand and regulatory requirements on the other, and in doing so is taking the operators of the data centers to task, for example on the issue of waste heat. The new Telehouse Datacenter in Kleyerstraße is already a pilot project in which waste heat from the data center is to be used to heat a new development in cooperation with Mainova. However, this – very positive – example is not a one-size-fits-all solution, as the conditions at other locations are far less optimal, not to mention the cost-effectiveness of retrofitting existing infrastructures.

Frankfurt will therefore also have to face the challenge of developing holistic concepts in terms of digitization and digital infrastructure – based on sound data and involving not only the data centers but also a large number of other stakeholders from startups to hyperscaler’s (AWS, Google, Microsoft & Co). The fact that these stakeholders are located in Frankfurt and the entire Rhine-Main area in a geographically very confined yet internationally networked space is an important component here that brings both human and technical advantages. So while corporate servers exchange data with low latency and mainframes enable the use of artificial intelligence, human decision-makers and specialists can physically come together to find solutions.

No one believes that this topic will lose its complexity and importance in the next few years. On the contrary, against a backdrop of dwindling resources and advancing climate change, social inequality, and political tensions, we need digitization more than ever – for greater efficiency and social participation, learner administration, and faster processes in general. The fiber rollout that is finally in full swing, together with 5G and its possibilities to help existing approaches such as IoT, AI, M2M, etc. make a breakthrough, are important building blocks here, as are clouds and applications.

To summarize: Only when data centers and the applications running there are seen as part of a complex ecosystem, as part of social change and the energy transition, and significantly more players are involved, can the promise of „ESG – positive“ digitization be realized. Whether in Frankfurt, Germany, or Europe, this creates a historic opportunity to shape the digital transformation in a humane, climate-friendly, free, and democratic way.

AUTHOR: Michael Jakobi, LL.M. is a consultant and project manager in the field of digital innovation & infrastructure at contagi Digital Impact

Quelle: Linked

Digitalization & “Asset Class Data Centers” – Real Estate, REITs and ESG (Michael Jakobi, contagi Digital Impact Group)