The government’s recent announcement that it will build more data centres highlights the demand for technological infrastructure. As data centres expand, the discussion around their environmental, social, and governance (ESG) implications grows. OpenAI's chief executive, Sam Altman, acknowledged the energy crisis in the artificial intelligence (AI) industry. He warned that the next generation of AI systems will consume more power than expected. This situation requires careful consideration of how data centres and AI impact energy resources and the environment.
Data centres face challenges related to energy consumption. They require significant amounts of electricity to operate, and AI computing systems increase this issue. Research indicates that the energy required for AI tasks grows at an annual rate of 26% to 36%. Projections suggest that by 2028, AI could use more power than the entire country of Iceland consumed in 2021. Additionally, data centres need cooling systems to manage the heat produced by servers, which adds to their energy consumption. The emissions from data centres owned by Google, Microsoft, Meta and Apple may be up to 662% higher than these companies claim. As these facilities increase in number and complexity, their energy requirements pose an environmental challenge.
The raw materials needed for data centre components raise further ESG concerns. The sourcing of materials such as rare earth metals and semiconductors has social implications. The extraction process often involves human rights violations and poor labour conditions. The need for large warehouses to store these components raises questions about land use and environmental impact. As demand for technology increases, the pressure on supply chains to source materials also grows, potentially leading to less responsible practices.
Despite these challenges, solutions exist to mitigate the ESG implications of data centres. Central to this is the use of renewable energy sources – rather than fossil fuels – to power data centres. The European Commission is currently examining green cloud and green data centre initiatives powered by electricity from renewables. Regulatory measures play a role in promoting sustainability within the tech industry.
Another key issue is the responsible sourcing of materials for computer components. By prioritising materials obtained through ethical and sustainable practices, companies can address the social and environmental challenges linked to raw material extraction. This approach enhances a company's ESG profile and can support resilient supply chains.
The growing demand for data centres presents challenges and opportunities for the tech industry. Embracing sustainable practices addresses some of the ESG concerns associated with data centres and creates opportunities for innovation in the clean tech sector. The AI industry must adopt a comprehensive approach to sustainability, including measuring energy and water use and prioritising renewable sources. Companies that prioritise clean technology and find ways to deliver essential services in an environmentally responsible manner position themselves for success.
