Washing away responsibility? BigTech's data centres and the growing water crisis

Whether you like it or not, data centres are the backbone of our online lives. They power everything from streaming services and social media to cloud computing and AI. They're mostly, "always on" and a critical and often overlooked resource underpins their continuous operation: water.

A recent investigation by The Guardian has cast a stark light on the huge water consumption of BigTech’s data centres, raising serious questions about their environmental responsibility and the true cost of our digital convenience. The article alleges a significant and often undisclosed reliance on water for cooling these energy-intensive facilities, particularly in regions already facing water scarcity. This revelation has the potential to deeply impact the environmental and social goals championed by these very tech giants, forcing a critical re-evaluation of their sustainability claims and potentially exposing them to accusations of ESG washing.

As defined by ESG Matrix, "ESG washing" refers to practices where companies misrepresent their ESG performance or commitments, making them appear more environmentally and socially responsible than they really are. The allegations surrounding BigTech’s data centre water usage highlight several potential forms of this practice.

For years, BigTech have publicly committed to ambitious Environmental, Social, and Governance (ESG) targets. Their websites are full of promises of resource efficiency, carbon neutrality, and positive community impact. However, the allegations surrounding their data centres' water usage present a direct challenge to these commitments, potentially exposing a significant blind spot in their sustainability strategies and raising concerns about environmental washing (or greenwashing), where environmental benefits are overstated or negative impacts are downplayed.

To understand the seriousness of these allegations, I took a look into the ESG sections of each company’s website, scrutinising their stated environmental and social goals in light of the potential impact of high, and potentially unsustainable, water consumption. I used Gemini 2.0 Flash to perform the analysis.

Draining resources and clouding sustainability claims (and the risk of Greenwashing)

The core environmental concern revolves around the sheer volume of water required to cool the heat generated by thousands of servers operating around the clock. Traditional cooling methods often rely on evaporative cooling towers, which can consume vast quantities of water, particularly in hot and arid climates. The Guardian’s report suggests that this consumption is often not transparently disclosed, making it difficult to assess the true environmental footprint of these companies and raising concerns about a lack of transparency, a key tactic in ESG washing.

• Contradiction of resource efficiency goals (and potential cherry-picking): all four companies mentioned in The Guardian's article explicitly state commitments to resource efficiency and minimising their environmental impact. High water consumption, especially in water-stressed areas, directly contradicts these goals. Some of the companies might be engaging in cherry-picking, heavily promoting smaller positive environmental initiatives while downplaying the significant water footprint of their data centres.

• Impact on water stewardship targets (and Sustainability Washing): some of the companies have even set ambitious “water positive” targets, aiming to replenish more water than they consume. Significant, unaccounted-for water usage in their data centres could make these goals unattainable and undermine their credibility as environmental stewards, contributing to sustainability washing by creating a misleading impression of overall positive impact.

• Exacerbating water scarcity (and Impact Washing): the withdrawal of large quantities of water for industrial purposes can strain local water resources, impacting agriculture, ecosystems, and the availability of clean water for communities. By not fully disclosing or addressing this potential negative impact while highlighting positive community contributions, some of the companies risk impact washing.

• The energy-water nexus (and vagueness in reporting): the article also touches upon the energy required to pump and treat the vast amounts of water used in data centres. This creates a negative feedback loop, where high water consumption indirectly increases energy demand, potentially hindering their progress towards renewable energy targets and overall carbon footprint reduction goals. General statements about "reducing energy consumption" without addressing the water-energy nexus in data centres could be seen as vagueness in reporting.

Ripples through communities and eroding trust (and Social Washing concerns)

The social implications of excessive data centre water consumption are equally significant, potentially undermining the companies' commitments to responsible community engagement and social equity and raising concerns about social washing, where social responsibility is overstated.

• Impact on local communities (and lack of transparency): If data centres are drawing heavily on local water resources, it can lead to competition and potential conflict with other users, including farmers, residents, and local industries. The alleged lack of transparency surrounding water usage prevents these communities from fully understanding and addressing the potential impacts.

• Erosion of stakeholder trust (and misleading narratives): the alleged lack of transparency surrounding water usage erodes trust between the tech companies and their stakeholders, including local communities, environmental organisations, and socially conscious investors. Presenting narratives of positive community engagement while potentially contributing to water stress can be seen as misleading.

• Environmental justice concerns (and downplaying negative impacts): The placement of data centres in or near vulnerable communities, coupled with high water consumption, raises environmental justice concerns. Downplaying the potential strain on local water resources in these communities while emphasising broader social responsibility initiatives could be a form of impact washing.

• Social license to operate (and overall Sustainability Washing): For BigTech companies to maintain their social license to operate – the informal permission granted by local communities and stakeholders – they need to demonstrate that their operations are not detrimental to the well-being of those communities. Significant and undisclosed water usage that impacts local resources can jeopardise this crucial aspect of their long-term sustainability, contributing to a broader sense of sustainability washing if their overall commitments are perceived as disingenuous.

An overview of the potential ESG conflicts and washing risks

Based on my review of their publicly stated ESG goals and the allegations presented in The Guardian, here's a summary of the potential impact on each company, including the types of washing risks (I avoid naming each company specifically):

Transparency, innovation, and accountability (avoiding the trap of washing)

The allegations surrounding data centre water consumption are a reminder that our digital lives has tangible environmental and social costs, and that superficial commitments are insufficient to address them. For BigTech companies to genuinely embrace sustainability and avoid accusations of ESG washing, several key actions are necessary:

• Enhanced transparency (to prevent lack of disclosure): companies must provide detailed and geographically specific data on their water consumption, including the sources of their water and the cooling technologies they employ. This transparency is important for stakeholders to accurately assess their environmental footprint and hold them accountable, preventing a key tactic of washing.

• Investment in water-efficient technologies (beyond cherry-picking): increased investment in and deployment of advanced cooling technologies that minimise or eliminate water usage is essential, rather than solely relying on highlighting minor efficiency gains while neglecting larger issues.

• Responsible site selection (addressing potential negative impacts): future data centre deployments must carefully consider local water availability and potential impacts on water-stressed regions, moving beyond simply choosing locations with cheap land or energy.

• Water stewardship initiatives (meaningful action over just offsetting): beyond their own operations, companies should actively engage in meaningful water stewardship initiatives in the regions where they operate, supporting conservation efforts and collaborating with local communities to ensure sustainable water management, rather than solely relying on distant offsetting projects.

• Meaningful stakeholder engagement (beyond vague promises): open and ongoing dialogue with local communities, environmental organisations, and investors is vital for understanding concerns, building trust, and co-creating solutions that address the water impact of data centres, moving beyond vague promises of community support.

• Independent auditing and verification (ensuring credibility): to ensure the credibility of their water usage reporting and sustainability claims, companies should consider independent third-party auditing and verification of their data centre water footprint.

Purpose and Means works with global companies aligning their AI and data protection activities with corporate ESG goals using a structured approach supported by workshops, education and training. Interested in hearing more? Feel free to get in touch to arrange a no obligation call to discuss how we can help assess impacts and build a roadmap for the work that needs to be undertaken.