The digital infrastructure powering our increasingly connected world presents our greatest climate challenge in the built environment today.

Data centres are among the most resource-intensive assets in the built environment, with a mid-sized facility using approximately 1.14 million litres of water daily—equivalent to 100,000 homes. Yet this intensity creates an unprecedented opportunity for environmental leadership that the real estate industry cannot afford to ignore.

The Measurement Gap

Having co-founded CRREM, I’ve witnessed firsthand how accurate measurement drives meaningful change. Data centres face a critical measurement challenge that undermines their sustainability claims.

Currently, there are a multitude of industry metrics like Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE), while collecting and generating the data is not fully standardised.

Recent analysis has estimated that major tech companies’ reported emissions between 2020-2022 were likely 662% higher than officially disclosed. Companies reported so-called market-based emissions based on green energy contracts, while location-based emissions would be preferable and more transparent. This isn’t just about compliance—it’s about credibility, avoiding what is called ‘green washing by numbers’.

There is growing demand for transparency on renewable energy procurement and Scope 3 emissions from investment and fund management companies that have allocated billions of dollars toward data centres. Accurate measurement is increasingly a competitive necessity.

The Infrastructure Transformation

What makes data centres unique infrastructure assets is their constant baseload demand and 24/7 operational requirements. This creates stability that traditional intermittent renewable sources struggle to meet alone.

However, forward-thinking operators are turning this challenge into opportunity through diversified energy portfolios combining solar, wind, hydroelectric, and partially, small modular reactors.

The geographic shift is equally significant. Traditional hubs like London and Dublin face planning constraints, while Nordic regions with abundant renewable energy and natural cooling advantages are growing as preferred locations.

This isn’t just about cost—it’s about future-proofing assets against regulatory change but also physical risks.

The AI Acceleration Factor

Goldman Sachs projects AI will increase global data centre demand by 160% by 2030. This growth is reshaping facility design creating a competitive edge for high-density, liquid-cooled systems that, paradoxically, are much more resource efficient than traditional designs.

While this could imply a certain rebound effect, total resource demand will still increase. Advanced cooling technologies can achieve ‘near-zero water usage’ scores while AI-driven optimisation can reduce cooling costs by up to 50%.

The Path Forward

The data centre sector stands at an inflection point. Operators implementing comprehensive ESG strategies—from renewable energy procurement to waste heat recovery—are not just meeting regulatory requirements but creating competitive advantages in capital access and tenant attraction.

For real estate professionals, the question isn’t whether data centres can become sustainable, but whether they are partnering with operators who understand that environmental performance and operational excellence are now inseparable. The infrastructure demands of our digital future require nothing less than transformational thinking about what sustainable development means in practice.

The Investment Imperative

The data centre industry’s sustainability journey represents urban development’s next frontier—one where environmental responsibility and technological innovation converge to create truly future-ready infrastructure.

But here’s what this surface analysis doesn’t reveal: the specific regulatory frameworks reshaping capital allocation, the emerging site selection criteria that could make or break investments, and the operational strategies that leading operators use to achieve both Tier IV resilience and near-zero environmental impact simultaneously.

Our comprehensive analysis with IQ-EQ, Norton Rose Fulbright, and ULI reveals the practical roadmap that forward-thinking investors are already implementing—including detailed compliance checklists, financial structuring insights for sustainability-linked financing, and location risk assessment tools that institutional investors now consider essential for due diligence.

Download the full “Driving Sustainable Data Centres” whitepaper for the complete strategic framework and actionable insights shaping the industry’s next decade. Download here.

Dr Jens Hirsch is a member of the ULI Europe Sustainability Council.

References:

1. World Economic Forum. (2024, November 7). Circular water solutions key to sustainable data centres. World Economic Forum. https://www.weforum.org/stories/2024/11/circular-water-solutions-sustainable-data-centres/
2. Milman, O. (2024, September 15). Data centre emissions probably 662% higher than big tech claims. Can it keep up the ruse? The Guardian. https://www.theguardian.com/technology/2024/sep/15/data-center-gas-emissions-tech
3. BlackRock. (2024, September 17). BlackRock, Global Infrastructure Partners, Microsoft, and MGX launch new AI partnership to invest in data centres and supporting power infrastructure [Press release]. https://ir.blackrock.com/news-and-events/press-releases/press-releases-details/2024/BlackRock-Global-Infrastructure-Partners-Microsoft-and-MGX-Launch-New-AI-Partnership-to-Invest-in-Data-Centers-and-Supporting-Power-Infrastructure/default.aspx
4. Goldman Sachs. (2024, May 14). AI is poised to drive 160% increase in data centre power demand. Goldman Sachs Insights. https://www.goldmansachs.com/insights/articles/AI-poised-to-drive-160-increase-in-power-demand
5. Prime Data Centers. (2024, April 22). Prime Data Centers launches enhanced sustainability strategy. Prime Data Centers Blog. https://primedatacenters.com/blog/prime-data-centers-launches-enhanced-sustainability-strategy/
6. PR Newswire. (2024, October 14). Axiado’s AI-driven dynamic thermal management solution cuts cooling costs in half and boosts security in AI data centres. https://www.prnewswire.com/news-releases/axiados-ai-driven-dynamic-thermal-management-solution-cuts-cooling-costs-in-half-and-boosts-security-in-ai-data-centers-302274963.html