What's Happening

By Christopher Richardson
Shareholder Advocacy Manager, Mercy Investment Services

January 13, 2026, Adrian, Michigan – Data centers, the physical backbone of the modern digital economy – including artificial intelligence (AI) and cloud computing – are expanding at an unprecedented pace. Due to this explosive growth, data centers are quietly becoming one of the most consequential drivers of greenhouse gas emissions, water consumption, and rising electricity costs, posing risks to climate goals and the communities hosting them.

Utilities across the United States report historic demand driven predominantly by new data center development, as a campus can consume as much electricity as a mid-sized city. AI-optimized facilities require exponentially more power due to high-density chips, cooling systems, and all-hours usage. Utilities are delaying coal plant retirements, expanding gas generation, and investing billions in new transmission and infrastructure, which create ecological and financial costs that may ultimately result in health and environmental impacts and higher electric bills.  

The Portfolio Advisory Board (PAB) is engaging with utilities such as Southern to understand how they are managing costs for their consumers, particularly their low-income consumers, in light of the unprecedented electric load growth from data centers. The PAB also seeks to understand how Southern is minimizing the environmental impacts of serving this rapid growth in demand.

In addition to their heavy electricity demand, computing facilities can use millions of gallons of water a day due to their evaporative cooling systems. This water use competes directly with community needs, agriculture, and long-term aquifer stability. Some technology companies report portfolio-level water metrics, but few disclose water use at the facility or watershed level, leaving investors and residents unable to assess local impact.

Data centers’ significant environmental and water footprint remains complex and largely invisible to the public and dangerously underexamined by policymakers and utilities. That complexity is precisely why investors, including the PAB, are increasingly stepping in. 

Engagements with technology companies such as Amazon, Meta (Facebook), and Alphabet (Google) are focused on urging companies to conduct climate transition planning, and to disclose how their growth strategies align with 1.5°C scenarios. Investors are seeking facility-level emissions data, resource needs, water risk assessments, renewable energy procurement, and capital expenditure alignment with climate goals.