Most tech companies have water management programs that are rated as weak, and many won’t even disclose how much water they use, according to a new analysis. This comes as much of the world has experienced sweltering heat waves and dried-up rivers amidst the growing impacts of climate change – and the western US is in the 22nd year of its worst drought in more than a millennium.
Megadrought in North America
This story is part of our Parched Earth series about the ongoing megadrought in south-western North America, the worst such drought in more than 1200 years
“After the summer that we’ve been through, not just in North America and Europe but everywhere, there is probably more scrutiny on companies that are operating data centres,” says Kata Molnar at Morningstar Sustainalytics, a research firm based in the Netherlands that rates corporate sustainability and conducted the analysis of 122 major tech companies.
Data centres make up a relatively small proportion of a country’s total water consumption compared with major uses like agriculture, power generation, manufacturing and drinking water. Even so, they can be large consumers of local water resources for their cooling systems and may consume even more if you include the huge amounts of water required by power plants that use steam turbines to generate the electricity they use.
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Northern Virginia’s “Data Center Alley” is home to the largest US data centre market with 390 hectares of data centres – an area larger than 700 American football fields – followed by northern California’s Silicon Valley with 62 hectares. But data centre hotspots are also popping up elsewhere in Arizona, California and Utah, even though parts of those states have been in drought for more than two decades.
To understand how the data centre boom could impact regional water supplies already under stress from drought and extreme heat, there needs to be an accurate accounting of how much water data centres routinely use. Currently there are no legal requirements in the US for companies to disclose this information, though many companies have announced plans to do so as part of water efficiency pledges.
Tracking water use
The by Morningstar Sustainalytics focused on companies providing internet software and services, data processing, enterprise and infrastructure software and telecommunication services. That included US companies such as Alphabet (Google’s parent company), Uber and Verizon, along with Chinese companies such as Alibaba and Baidu. But it excluded companies such as Amazon or Meta because they were either categorised differently or their sustainability rating process was still ongoing.
The analysis found that just 16 per cent of the data centre operators disclosed enough public information to calculate their organisation-wide water usage. This was defined as the volume of water withdrawal in cubic metres per million dollars of corporate revenue.
“If you use it as a gauge for how many companies are tracking water usage, it could mean companies are doing very little of that,” says , also at Morningstar Sustainalytics. It is also possible that some companies are tracking water usage without sharing that information publicly, she says.
About half of the companies included in the analysis disclosed information about their water management programs. Of those companies that shared information, 61 per cent were rated as having weak programs, 33 per cent got adequate ratings and only 5 per cent received a strong rating. The ratings were based on factors such as having initiatives to reduce freshwater use, setting water reduction targets and deadlines, and measuring water usage on a regular basis.
Microsoft stood out as the only company to receive top scores in many areas of water management, while also reducing organisation-wide water usage relative to its annual revenue. The company has taken steps to both improve its water usage efficiency and invest in efforts to replenish water supplies in drought-stricken regions that house its data centres, including Arizona and Texas. “The majority of other companies scored well in just one or two areas,” says Johnson.
Microsoft declined to comment. But in April 2022, the company shared data comparing the average water use efficiency of its . This showed that US-based data centres are currently average in terms of water consumption and that those in regions with higher temperatures – specifically the Asia Pacific region – required the most water for cooling. Microsoft has also emphasized data centre cooling systems that minimise water consumption, including using outside air instead of water for when ambient temperatures are below 29°C (85°F).
Just 39 per cent of data centre operators reported monitoring their own water usage in the by the Uptime Institute, an organisation based in New York that advises data centres. Most of the companies that don’t track water usage said there was “no business justification” for doing so, meaning that their customers didn’t care and that the cost of water was negligible compared to their electricity bills.
A typical data centre, which may house several thousand servers, , equivalent to what a city of 30,000 to 50,000 people uses. But “hyperscale” data centres owned by tech giants such as Amazon, Google, Meta and Microsoft – in some cases, hundreds of thousands of servers – and require much more water.
The US has the with more than 2700, including . Other countries such as the UK, Germany and China each have fewer than 500 data centres. Hundreds more data centres are under construction around the world, as demand continues to grow. That reflects a pandemic-era surge in data processing demand due to more people working and playing from home. Annual corporate spending worldwide on cloud services for business needs has surged from $129.5 billion in 2020 to an expected $200 billion by the end of 2022.
There can be other challenges in discovering how much water is used by a neighbourhood data centre. The Oregonian newspaper with the city of The Dalles, Oregon, as the city is trying to block efforts to make the water usage of a data centre operated by Google a matter of public record.
The Uptime Institute recommends that data centres track water usage because “even in relatively non-water-stressed environments, water use is becoming a concern”. It also warns that a growing number of communities require data centres to be “designed for minimal or near-zero direct water consumption”.
Data centres and drought
Water-consciousness is evident in some of the fastest-growing US markets for data centre construction such as Phoenix, Arizona. The Phoenix suburb of Chandler is considering that would involve a more rigorous approval process, in part because of water conservation concerns for the drought-stricken region. Although many southwestern states are facing megadrought conditions, Arizona have been planning for a much drier future by taking steps to conserve water along with securing backup water supplies.
Data centres also need to use water even more efficiently as intensifying drought conditions are linked to that can stress both data centre cooling systems and the power grids they rely on. In September 2022, Twitter experienced a due to extreme heat conditions in Sacramento, California.
It is important to track water usage at specific data centre sites because of regional differences in water scarcity, says , who has been a sustainability consultant for the Uptime Institute and authored a .
Data centres can consume even more water beyond their immediate surroundings through reliance on distant power plants that use steam turbines. “The direct water consumption is significantly less than the indirect water consumption through the power generation,” says Mytton.
There are ways to more fully account for data centres’ electricity and water sources along with regional water scarcity. Some researchers have proposed a measure called water scarcity usage effectiveness, which evaluates the impacts of both on-site and indirect water usage on regional water availability. They have shown how that information can help data centres to minimise water usage in cities such as Phoenix, San Francisco and Denver, Colorado.
“You're expanding it from looking at just onsite to the power generation source,” says at Villanova University in Pennsylvania. “And you're looking at it relative to the amount of water available where that water is being consumed.”
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