The continued emergence of new artificial intelligence (AI) has brought an increased demand for data centers to power these emerging technologies. With this increase in demand for data centers, the emphasis on their power consumption has also become a focal point for stakeholders. According to a report from Bloom Energy, data centers in the United States are expected to require 55 gigawatts of new power capacity within the next five years. The power demand by 2030 is expected to reach 272% of the 2023 level. These projections have put data centers’ environmental impacts front and center.

While the increasing need for power remains a pressing issue, the market value is undeniable. The global data center market is expected to be valued at $452 billion by the end of 2025. As the industry continues its upward trajectory, investors are drawn to the high demand of data centers, their continued growth potential and the essential infrastructure they provide for the digital economy.

With growing investor interest, data centers can’t overlook their power consumption concerns. The environmental impact and high energy costs associated with such power needs may make it difficult for data centers to set and reach sustainability goals, which investors are also looking to achieve within their portfolios. Investors are seeking out information about the sustainability of data center investments, including new construction and existing operations.

Collecting and reporting ESG data formally offers multiple benefits to data centers from attracting investor capital, establishing leadership, to efficiency in operations. Reporting is already on the rise. GRESB, a global partner to financial markets in climate-critical industries, has seen an increase in participation from data centers and those participating are providing insights to the ever-increasing sustainability expectations and emerging regulations.

Driving Operational Efficiency and Reducing Risks

Tracking key sustainability (or efficiency) metrics allows data centers to evaluate, compare, and improve data center operations across a variety of non-financial indicators. Electricity consumption, GHG emissions, water usage, and biodiversity and habitat are now indicators that investors look to understand the potential impacts on financial performance.

Across the sector, these indicators are showing upward trends. The latest GRESB Real Estate and Infrastructure Benchmark data pointed to such increases from 2023 to 2024. The average water consumption for data centers from GRESB participants in 2023 was 267.8 ML (megaliters) vs. 783.1 ML in 2024, per entity. Average electricity consumption in 2023 was 397,691.0 MWh’s vs. 471,065.4 MWh’s in 2024, per entity.

Establishing ESG data collection processes provides data centers with the necessary insights to improve upon these numbers for efficiency while earning higher sustainability scores that investors require. The leading data center managers earning high GRESB benchmark scores were found to prioritize renewable energy efficiency, renewable energy procurement, and a range of other sustainability features, such as fuel cells and water recycling.

Enhancing Investor Confidence and Attracting Capital

CBRE Research has recently found that 97% of investors surveyed expect to increase their allocations to data centers and 93% of those investors noted sustainability information as either very or at least somewhat important to their decision making.

Sustainability data allows investors to assess and manage risks associated with environmental regulations, resource scarcity, and climate change. What’s more, data centers prioritizing sustainability shows investors that they are able to adapt to future environmental and regulatory challenges that may arise, without a disruption in operations or returns.

GRESB has found that investors are divided in their classification of data centers. Some categorize data centers as real estate, focusing on strong leasing fundamentals and high-quality tenants. Others describe data centers as infrastructure, often looking to build and sell. Despite this divide, the core data collection remains a priority.

Investors and managers have been found to vary in their expectations for reporting as well. GRESB has found that real estate investors focus on facility-level reporting, mirroring other property types. These investors have expected “bottom-up” information, aggregating data from individual facilities to companies. Yet, infrastructure investors prefer aggregated, company-level reporting. Infrastructure investors do not expect disaggregated information or have overriding privacy concerns.

These contrasting perspectives stem from a variety of factors such as operational practices, tenant agreements, and data availability. Regardless of the reporting expectations, the core data points across GHG emissions, electricity consumption, water usage and biodiversity remain a priority to attract investors.

Demonstrating Leadership in Sustainability

Data centers can differentiate themselves from their peers when prioritizing sustainability. This leading differentiator can improve brand reputation, attract more clients for new business opportunities, and draw in new talent.

Sustainability data can also support data centers efforts to build stronger relationships and enhanced reputations locally. Consider Northern Virginia, where more than 300 data centers are now located in the state’s suburban landscapes, and have become an issue of concern for some residents. Transparent data can get ahead of local environmental regulations and ease resident concerns on the facilities’ impact to the local environment.

Participation from data centers in the annual GRESB Assessments has increased 28% year over year, further showcasing the interest in monitoring and improving sustainability performance. In 2024, data centers reported data to GRESB from more than 840 locations globally. As the data industry continues to grow, more will seek out opportunities to demonstrate their sustainability efforts as a differentiator.

Looking Ahead 

Data center growth will continue in 2025, along with investor interest. Those who can meet the request for credible information on sustainability performance on these high-impact assets are likely to become market leaders.

Dr. Chris Pyke, Chief Innovation Officer at GRESB, a global partner to financial markets in climate-critical industries 

Dr. Chris Pyke’s bio:

Chris Pyke is an environmental scientist and Chief Innovation Officer for GRESB. Dr. Pyke has cross-cutting responsibility for innovation, communications, and supervision of the GRESB Foundation. Dr. Pyke previously served as Senior Vice President for Arc Skoru (part of the USGBC family of organizations), Chief Strategy Officer for Aclima, and a research scientist for the U.S. Environmental Protection Agency. Dr. Pyke is on the faculty of the Urban and Regional Planning Program at Georgetown University. He holds a Ph.D. and M.A. from the University of California, Santa Barbara.