Community Backlash: A Material ESG Risk for Data Centers

Community backlash is rapidly becoming one of the most material ESG risks facing large data center operators. Across regions, projects are increasingly delayed, downsized, or rejected due to public opposition driven by concerns over energy use, water stress, land impact, grid pressure, and long-term sustainability.

Recent reports show a growing number of data center proposals being voted down—raising alarms not just for Big Tech, but also for developers, utilities, labor unions, and local governments. Social activism is no longer a soft issue; it is a real transition risk with direct financial consequences.

The case for double materiality is clear:

• Impact materiality: Data centers exert significant environmental and social pressure on host communities.

• Financial materiality: Community resistance affects approvals, timelines, costs, reputation, and growth.

What’s changed is that communities are increasingly informed—and asking a simple but powerful question: How exactly are data centers becoming more sustainable?

Too often, operators lack clear, evidence-backed answers.

The Core Challenge

The issue is twofold:

• Limited measurement clarity across the full lifecycle of data center assets.

• Constrained sustainable options at scale, even where intent exists.

In the race to build capacity, the question is no longer just about speed—but about building responsibly.

Why Measurement and Education Matter

Communities are demanding proof, not promises.

Lifecycle measurement, transparency, and education are now essential to earning trust and securing long-term viability. Community backlash is not resistance—it is a signal. Data center operators that respond with clarity, credible measurement, and genuine sustainability intent will be best positioned to grow—with communities, not against them.