Sustainable Data Centres of the Future – Navigating Challenges, Unlocking Opportunities

This article is contributed by Daniel Pointon, Group Chief Technology Officer, and Nelson Lim, Group Chief Financial Officer, STT GDC. It was originally published in our 2024 ESG Report.

How are emerging technologies like AI, automation and next-gen cooling systems shaping the future of sustainable data centres?

Daniel: Emerging technologies like AI, automation, and advanced cooling systems are transforming the future of sustainable data centres at scale. AI, for instance, is capable of enhancing operational efficiency and sustainability by optimising cooling management. This is particularly crucial as AI and other accelerated computing workloads continue to grow, requiring higher power densities and more efficient cooling solutions. Our collaboration with AI specialists to host GPU clusters in our data centres, utilising innovative liquid cooling technologies, underscores our commitment to environmental stewardship.

Automation, when integrated with AI, allows for precise control over data centre operations. This synergy enables us to manage complex systems more effectively, reducing inefficiencies and enhancing sustainability. By automating routine tasks, we can focus on strategic initiatives that drive innovation and sustainability. This approach not only improves operational efficiency but also supports our broader ESG goals.

Advanced cooling systems are another critical area of focus. We have invested in liquid cooling technologies, which offer superior efficiency compared to traditional methods, reducing the PUE to between 1.06 to 1.15. Our trials with various liquid cooling systems have led to the development of flexible colocation products designed to support high-density AI and other high‑performance computing workloads sustainably. This not only reduces energy consumption but also enables our customers to achieve greater compute efficiency.

Looking ahead, data centres will be designed as intelligent, adaptive, and sustainable facilities. The integration of AI and machine learning will enable autonomous management and predictive maintenance, streamlining operations and enhancing efficiency. We envision data centres strategically located near renewable energy sources, forming integrated energy and data centre campuses. This approach will not only reduce environmental impact but also ensure scalability and resilience, aligning with our vision for a more sustainable future.

How does sustainability-linked financing, such as STT GDC's recent SLP issuance, align with our business growth objectives?

Nelson: Sustainability-linked financing offers businesses a strategic pathway to integrate sustainability performance with access to capital. Our issuance of Sustainability-Linked Perpetual (SLP) securities exemplifies this approach, aligning our financing directly with measurable sustainability targets. By doing so, we’re aligning our capital structure with our long-term vision for a sustainable future, reinforcing our commitment to environmental responsibility. This strategy also diversifies and expands our debt investor base, enabling us to access capital on more competitive terms, providing the financial flexibility needed to expand our infrastructure and meet the growing demand for data centre services.

The SLP issuance presents a unique opportunity for us to drive long-term growth in the rapidly evolving digital economy. As demand for data centre services continues to rise, aligning our financing strategy with sustainability goals enables us to attract forward‑thinking investors who share our commitment to responsible growth. The favourable response to our SLP issuance, coupled with our enhanced Sustainability-Linked Financing Framework, underscores our strong position in both the financial and sustainability markets.

What do you see as the biggest disruptors or opportunities in the data centre industry over the next five to 10 years, particularly from an ESG perspective?

Nelson: As we look ahead to the next five to 10 years, the data centre industry is poised for significant transformation, driven in part by the escalating demand for data-driven sustainability insights. Investors and financial institutions are increasingly seeking more than just broad commitments to environmental responsibility; they require detailed transparent data that quantifies progress in energy efficiency, carbon reduction and resource management. The integration of ESG criteria into investment evaluations means that the ability to provide reliable sustainability data will become a crucial factor in securing investment and maintaining access to capital. This data will not only influence financing decisions but will also inform our strategic direction, enabling us to align our business growth with the evolving expectations of a sustainability-conscious market.

Daniel: The data centre industry is on the cusp of a transformative period, with several key trends set to reshape its landscape over the next five to 10 years. From an ESG perspective, one of the most significant opportunities will be the integration of renewable energy sources, including solar, wind, hydrogen and potentially nuclear energy. The demand for green electrons flowing into data centres is expected to continue growing, driven by both regulatory pressures and stakeholder expectations.

Hydrogen, as a clean fuel, presents considerable potential for large-scale energy storage and could provide a reliable, low-carbon power solution for data centres. However, its widespread adoption will require addressing several challenges, including high production costs, complex storage and transportation logistics, and the need for significant infrastructure development to scale its use.

Small modular nuclear reactors (SMRs) are also gaining traction as a reliable, low-carbon energy source for data centre campuses. They offer a stable, continuous power supply, which is crucial for data centres, while significantly reducing the industry’s carbon footprint. As the industry continues to evolve, these emerging energy solutions will play a pivotal role in shaping the future of sustainable data centre operations.