Catriona Shearer, Global Head of Data Centre Consulting at JLL, believes that strategic investments in sustainability and precise data reporting will be essential for operators aiming to thrive in an increasingly regulated environment, as she explains.
The data centre industry stands at a crucial juncture. The digital revolution, fuelled by AI and data-driven technologies, demands ever-increasing data processing capacity. JLL’s 2025 Global Data Centre Outlook projects substantial industry growth, with 10 GW of new capacity expected in 2025, representing a potential 15-20% CAGR through 2027.
However, this growth comes with intensified scrutiny regarding environmental impact and the urgent need for sustainable practices. The increasing demand for transparency and accountability in ESG practices is undeniable. Stakeholders, evolving regulations, and industry certifications are pushing data centre operators to disclose their environmental impact with unprecedented precision and detail.
At the heart of this challenge lies data reporting, a critical function now essential for navigating the complex regulatory landscape. This is of particular importance for companies operating in the EU with most operators required to report under the Corporate Sustainability Reporting Directive (CSRD) between 2025 and 2027.
It’s imperative that data centre operators prioritise investment in sustainability compliance to meet regulatory requirements and ensure long term success. This is not merely a matter of compliance; it’s about building trust, demonstrating responsibility, and ensuring a sustainable future for the digital ecosystem.
The data reporting challenge
The data collection process is hugely time intensive – especially for larger companies. Operators need to be acutely aware of the regulation with which they need to comply, the time scales needed to collect the data required and when they need to disclose. Companies required to meet the reporting deadline this year should have already started collecting data and ensuring it is in line with requirements.
However, there are significant challenges for data centre operators in achieving accurate and credible reporting. Data centres generate vast amounts of operational data, but only some of that data is relevant for ESG reporting requirements. Identifying, validating, and assuring the accuracy of this data requires thorough assessment and robust processes. The scale and complexity of this task should not be underestimated.
Adding to this complexity is the fact that ESG reporting frameworks are, to some degree, still in flux. A case in point is in the EU, where the Commission’s new Omnibus package will now simplify regulation in sustainability reporting in order to reduce the burden on business and increase the bloc’s competitiveness.
According to recent reports, this is likely to mean a streamlined version of the CSRD including changes to key elements of the framework such as the removal of companies with fewer than 1000 employees in its scope and a refocus on single (financial) materiality as opposed to double materiality.
While aiming to streamline reporting, the Omnibus package nevertheless introduces a degree of uncertainty, requiring data centre operators to remain agile and adaptable in their approach. Given the political context, companies should anticipate further change and factor in extra time for data collection and assurance.
Strategic investment is key
So, how can data centres effectively navigate this evolving landscape and meet the growing demands for ESG transparency? The key lies in strategic investment in human capital. Investing in qualified personnel with expertise in ESG reporting is paramount.
Given the complexity of regulations like the EU Taxonomy, data centres require individuals with a nuanced understanding of sustainability reporting frameworks, data management best practices, and regulatory compliance requirements. These specialists will play a crucial role in developing and implementing robust ESG reporting strategies, ensuring data accuracy, and navigating the intricacies of regulatory compliance. Their expertise will be invaluable in helping data centres meet their reporting obligations and demonstrate their commitment to sustainability.
Alongside this, strategic investment in infrastructure is essential for long-term sustainability. This means investing in systems, software and processes that can support businesses to meet new and evolving requirements. For example, specialised software can automate data collection, cleaning, and analysis, using AI to extract key insights across predetermined metrics. As well as saving a significant amount of time, this software improves data quality, reduces errors, and minimises the risk of misreporting.
The path forward
There are no shortcuts to effective data reporting. Strategic investment in expertise and infrastructure is not just recommended – it’s the only viable path to success in meeting current and future regulatory demands.
Data centre operators have the opportunity to embrace data reporting not as a burden but as a strategic tool. By investing wisely in both people and technology, data centres can ensure compliance, build trust, and contribute to a more sustainable digital future as well as improving their own efficiency and making better-informed decisions about their operations.
The future of data centres depends on robust, transparent, and accurate data reporting.
