Powering the Future – ESG and Renewable Energy Commitments in Data Center Contracts Across APAC

The unprecedented expansion of data center demand across the APAC region has brought with it increasing scrutiny by stakeholders, policy makers, and the broader public on data center power consumption. This surge coincides with evolving environmental regulations, rising customer expectations, and an industry-wide shift towards more sustainable ways of operating. Developers and operators are being pushed to demonstrate higher levels of energy efficiency and stronger alignment with broader environmental, social, and governance (ESG) goals. These expectations are no longer just talking points – they are being built into contracts, where sustainability obligations sit alongside traditional performance measures such as uptime and reliability.

Customer demands are evolving quickly. Beyond the standard requirements for operators to comply with local environmental laws and take remedial action in the event of breach of mandatory standards or contamination, many agreements now also require operators to align with customers’ own sustainability frameworks, codes of conduct, or supply chain standards. These frameworks often set out detailed expectations on workplace safety, energy efficiency and ESG practices. Customers are also asking operators to provide sustainability data to support their own internal and external obligations and progress toward corporate targets. Many of the biggest hyperscale players in the U.S. have undertaken sustainability pledges to go carbon neutral or emission free within the coming years, and they expect their partners across APAC to help them get there.

In parallel, operators in the region face an expanding set of additional reporting obligations and service levels tied to sustainability. Beyond compliance, they may be obligated to prepare regular environmental, health and safety (EHS) reports, promptly investigate and notify incidents, and maintain robust EHS management systems. Contracts also require that only qualified and competent personnel may design, construct, operate, and maintain the facilities in line with ESG targets. In some cases, these obligations are directly tied to service levels, which entitles customers to claim service credits if standards are not met. In this manner, ESG is positioned alongside uptime and reliability as a performance metric.

Renewable energy is another area where expectations are rising fast. Many customer agreements across APAC now include parties’ commitments to develop renewable procurement strategies together, or for operators to sell or procure renewable power generated by wind, solar, or other captive renewable power projects. These provisions demonstrate that more customers want tangible renewable sourcing solutions as part of their long-term energy strategy.

For investors, investment managers, and developers, these developments carry important implications. ESG and renewable energy requirements are increasingly being embedded in long-term commercial agreements, and ESG risks (and existing breaches) should be factored into investment due diligence. Customers are seeking partners who not only deliver reliable, high-performance infrastructure, but also demonstrate transparency in their sustainability performance and align their practices with international ESG standards. For investors, focusing on energy-efficient technologies, renewable sourcing, and sustainable investing is becoming critical to creating long-term value.

The trajectory is clear. As customer expectations continue to evolve and demand for sustainable solutions grow, data center operators that proactively embed ESG strategies today – whether through energy efficiency, renewable energy, or responsible practices – will be best placed to meet these demands and capture growth in an expanding, environmentally conscious, and socially aware digital economy across APAC and globally.

Read more in the Asia Funds ESG + Sustainability Survey 2025 Report.