AI Growth Raises Concerns Over Datacentre Power Usage

Today’s ESG Updates

• AI’s Concerningly Rapid Growth: ESG and energy consumption concerns for data centres from adoption of AI
• Newly Passed U.S. Tax Bill: New legislation sparks environmental worries and job security concerns for 830,000 U.S. citizens
• Meta’s New 650MW Purchase: Meta boosts renewable energy efforts to power US datacentres and hit Net-Zero goals
• Datamaran Analysis of CSRD Reports: Key ESG reports show high risk and inconsistent disclosure standards

AI’s rapid growth poses significant ESG risks for data centres

Data analyses show that artificial intelligence systems are predicted to be responsible for up to 49% of total data centre power consumption (excluding cryptocurrency mining) by the end of 2025. If left unchecked, AI energy consumption may potentially exceed the total energy consumption of the Netherlands by twice its amount by the end of this year. This rapid growth may pose critical ESG challenges, increasing data centres’ reliance on fossil fuels, and affecting companies’ abilities to meet internal environmental targets. Experts emphasise the need for more transparency regarding the energy consumption of AI systems to maximise efficient energy usage. Companies and investors can closely monitor these developments and stay updated using ESG tools. 

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Further reading: AI could account for nearly half of datacentre power usage ‘by end of year’

Trump’s newly-passed bill jeopardises U.S. job market and undermines nationwide sustainability efforts 

The major tax bill passed by House Republicans will predictably cost 830,000 Americans to lose their jobs by 2030, raise the average household bill by more than $230 by 2035, and cause the U.S. to release 260 million tonnes more pollution than expected by 2035. The Republican legislation also eliminates support for energy efficiency programs, interrupting America’s shift towards clean energy. The newly-passed bill seems to disproportionately benefit high-income households, targets working Americans, and threatens to exacerbate the climate crisis. Combined with the tariffs that Trump imposed, this policy will likely reshape America’s economic market and environmental landscape, sparking concerns from ESG and business leaders alike. 

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Further reading: Trump’s tax bill to cost 830,000 jobs and drive up bills and pollution emissions, experts warn

Meta purchases 650MW of renewable energy to help reach their net-zero emissions target by 2030

Meta has announced its acquisition of 650MW of solar energy in Texas and Kansas from energy provider AES to fuel their data centres.  In 2020, 100% of Meta’s goals to meet operational energy needs using renewable sources were achieved. Meta intends to reach net-zero emissions across its entire value chain by 2030, and may potentially add 9.8GW of renewable energy to local grids in the U.S. through wind and solar projects by the end of this year. This move is the latest renewable energy purchase by the company following various clean energy agreements.

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Further Reading: Meta Buys 650 MW of Renewable Energy to Power U.S. Data Centers

CSRD analysis reveals top sustainability risks and priorities

Datamaran conducted an analysis of over 300 CSRD reports, and produced findings which suggest that climate, workforce, and business conduct are key priorities typically reported by companies. Furthermore, negative impacts tend to significantly outweigh opportunities, with 37% of IROs classified as negative, contrasting only 13% of them being marked as opportunities. Across industries, the number of IROs disclosed had varied widely, emphasising an inconsistent materiality threshold across different industries, but most companies excluded entity-specific IROs. These trends highlight the multifaceted complexities of ESG reporting, and companies can deepen their understanding of these dynamics using ESG solutions.

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Further reading: Datamaran Analyzes 300+ CSRD Reports to Reveal Top Sustainability Risks and Priorities

Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: imgix