Amid the increasing trend of the market to leverage sustainable financing to fund energy-intensive data centres – a sector that is booming because of the rising power consumption involved in artificial intelligence ( AI )-related computing – the sustainability practices of some data centres are worrying investors, according to a recent report.

Despite most of the pure players in the data centre sector recording a fair overall environmental, social and governance ( ESG ) performance, a wide range of variation is found in how the centres assess their power usage efficiency, which greatly affects their environmental performance, causing it to record the lowest score among the three pillars of the data centre entities involved in Sustainable Fitch’s Understanding ESG Impact Assessments for Data Centres report ( as seen below ).

However, non-pure data centre players, such as Amazon, Meta and Alphabet, the report notes, that derive only a portion of revenue from data centres, managed to deliver more satisfying average or above results due to regulatory compliance.

Globally, data centre-related greenhouse gas emissions, according to the report, are expected to rise above 1000 terawatt-hours in 2030, three times that in 2020, of which a fifth will be used to power AI-related activities.

Water

Overall, a lack of information on water usage among data centre entities surveyed was observed, the Sustainable Fitch report notes, pointing to an oversight with respect to assessing their environmental impact. “Only a few entities disclose enough data on water usage effectiveness to establish a historical trend and understand how data centre operations are using water.”

Notably, water usage among global data centres in 2025 has almost doubled that of 2016 to 342 million gallons; and, the report highlights, the estimated amount of daily water use by data centres will increase by another 100 million gallons by 2030.

As well, water resources will be further strained by the increasing size of data centres, or hyperscale facilities, according to the report, which consume as much as five million gallons of water a day.

“At end-2024, more than 1,100 of these [hyperscale] facilities had been built, with about 59% of all installed capacity being attributable to US technology companies Alphabet, Amazon and Microsoft,” Sustainable Fitch notes. “In the context of water usage, the regional concentration of hyperscale data centres and data centres is an important contributor to increasingly high levels of water stress and scarcity.”

Attracting sustainability funding

As tech companies have most of their infrastructure projects focused around data centres, they feel a pressing need to shore up sustainability standards in an effort to rekindle the stagnating issuance of labelled debt. Market activities died down after the peak in 2021 and remain on track this year to take a deeper dive.

A tech sector looking for a stronger penetration into the sustainability market, Sustainability Fitch advises, needs to improve not only power effectiveness, but also water usage and operational performance, to make its sustainability commitments more realistic and measurable.

Deals done

While green issuances in Asia to support data centres are still at a nascent stage, an upbeat sentiment hints at growing activities. Currently, the deals are concentrated in Singapore and Malaysia.

In Malaysia, for example, data centres are being built by Singapore’s Princeton Digital Group with its US$280 million green loan; and the Chinese IT service provider GDS has raised US$270 million in green financing for its data centres there.

Earlier this year, Equinix, a global data centre company, made its debut in the Singapore dollar market through the issuance of a S$500 million ( US$385 million ) green bond that underpins its data centre projects in the Asia-Pacific.