Data Centre Water Use Alarming

Data centers  have one problem - they get hot. To keep from overheating, large data  centers pump hundreds of millions of gallons of water a year through the facilities, according to reports.

That high demand for water has some investors concerned, especially in places where natural water resources are becoming ever more precious, like tech-heavy California.

"We definitely want our portfolio companies to be cognizant of their water use and take the appropriate steps to minimize their water use and recycle water," said Brian Rice, portfolio manager at the California State Teachers' Retirement System, which manages about $189 billion in assets as of June 30. He cited water usage as a concern at data centers as well as at other portfolio companies, such as those in agriculture.

California -  home to companies running some of the world's biggest data centers—houses more than 800 of the facilities, the most of any U.S. state, according to Dan Harrington, research director of 451 Research LLC, a technology consulting firm.

Water usage there is especially a concern as the state's drought pushes into its fifth year. California Governor Jerry Brown issued an  executive order in May to extend statewide emergency water restrictions, establishing long-term measures to conserve water.

The water risk to investors of California-based companies operating data centers will not affect them gradually, said Julie Gorte, senior vice president of sustainable investing at Pax World Management LLC.

"It will probably come in one big splashy moment," she said.

As a result, some sustainable-minded investors are trying to enhance their understanding of water risk before it becomes a liability, said Cate Lamb, head of water at investor environmental advocacy group CDP.

The group held a series of workshops this year for investors to discuss their most crucial water reporting needs, such as isolating water risk of individual assets. The number of institutional investors committed to its water engagement program with companies has grown to 617 from 150 in 2010.

Operational efficiencies at data centers have a direct link to companies' profitability and pose an increasing risk for investors in a "tense" climate change environment, said Himani Phadke, research director at the Sustainability Accounting Standards Board, a non-profit that writes corporate sustainability reporting guidelines for investors.

Companies, like investors, are trying to get ahead of the risk.

Read full article at: Bloomberg

Media

Taxonomy

• Energy
• Energy Consumption
• Hardware
• Data