The increasing reliance on digital technologies has heightened the demand for sustainable data centers. Operators are now prioritising ESG performance to align with climate goals, reduce environmental impact, and meet regulatory and customer expectations. Key considerations include energy and water efficiency, site selection based on resource availability, and resilience against climate risks such as droughts and extreme weather events.

Asset managers, operators and institutional investors must understand the opportunities and imperatives of sustainable data center development, outlined in our white paper.


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At a glance

  • How forward-looking operators are improving their ESG profiles
  • The importance of proactive compliance to help mitigate risk when navigating the data center regulatory landscape
  • The integration of ESG metrics into operational and investment decision-making
  • The evolution of data centers to coming not just efficient, but resilient
  • Identifies pivotal levers for reducing stranded risk and maintaining long-term competitiveness 

Five key messages

1. ESG performance relevant factors

Sustainable data centers must integrate ESG principles across operations. This includes enhancing energy efficiency through metrics like PUE and CUE, reducing water consumption via closed-loop cooling systems, and implementing waste heat recovery. These measures not only lower environmental impact but also improve investor appeal and operational resilience.

2. Risk management and resilience in data centers

Resilience is vital in the face of climate change and rising energy demands. This chapter explores infrastructure design, strategic site selection, regulatory navigation, and talent acquisition. It highlights the importance of redundancy, sustainable construction, and proactive planning to mitigate risks and ensure long-term viability.

3. The impact of certifications on sustainable data centers

Certifications such as LEED and BREEAM play a pivotal role in validating sustainability efforts. They promote energy efficiency, resource conservation, and transparency. ESG reporting, as part of CSR, enhances accountability, investor confidence, and regulatory compliance, while sustainability-linked loans incentivise performance improvements.

4. Middle-and back-office management

Effective sustainability reporting and operational monitoring are essential. Middle offices manage energy procurement through diversified PPAs and green tariffs, while back offices utilise AI for predictive analytics and risk mitigation. Green leases formalise sustainability commitments between landlords and tenants, fostering transparency and regulatory alignment.

5. The future of sustainable data centers

The sector is evolving rapidly, driven by AI and digital assets. Future data centers will rely on diversified renewable energy sources, including hydropower and potentially nuclear via SMRs. Emerging markets with abundant green energy and cooler climates offer strategic advantages. Standardised sustainability metrics and transparent disclosures will be key to maintaining investor trust and regulatory compliance.

 

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Contacts

Stefan Feuerriegel
Stefan Feuerriegel
Global Head of Real Estate; Head of Germany
Email
stefan.feuerriegel@nortonrosefulbright.com
T: +49 (40) 970799150
Kirsty Harrower
Kirsty Harrower
Partner
Email
kirsty.harrower@nortonrosefulbright.com
T: +44 (20) 74443007
Ammad Waheed
Ammad Waheed
Partner
Email
ammad.waheed@nortonrosefulbright.com
T: +1 713 651 5407
Joris Ravelli
Joris Ravelli
Partner
Email
joris.ravelli@nortonrosefulbright.com
T: +31 (20) 4629405
Jean-Pascal Bus
Jean-Pascal Bus
Partner
Email
jean-pascal.bus@nortonrosefulbright.com
T: +33 (1) 56595301

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