Data center demand prompts call for ESG planning — JLL survey 

ENVIRONMENTAL, social, and governance (ESG) planning should be prioritized as data center investments in the Philippines and across the Asia-Pacific (APAC) region are expected to grow due to surging demand, according to a report by real estate consultant JLL.

In a statement, JLL said its survey showed that energy consumed by data centers doubles every four years due to surging demand, adding that the sector now accounts for up to 4% of global greenhouse gas emissions.

“Demand for data centers — the buildings that house computer systems and servers that store and process the world’s data — has skyrocketed due to the widespread adoption of digital communication tools and e-commerce,” JLL said.

The survey was conducted across 505 data center managers in the APAC region, of which 70% are operated by enterprises while 30% are operated by service providers. Of the total, 30 data center managers are located in the Philippines.

JLL said the survey showed that 85% of the data center managers in the region believe that sustainability will significantly impact their operations and decision-making.

However, the survey revealed that only 28% of data center operators have visibility in terms of their energy usage data, which would allow them to add transformational business value, maximize efficiency and reduce waste.

“Addressing concerns surrounding greenhouse emissions is a priority, especially when it comes to our energy and sustainability practices in the Philippines,” JLL Philippines Energy and Sustainability Manager Nix Garchitorena said.

JLL APAC Head of Data Centers Chris Street said the region is arguably the most dynamic data center market globally, adding that strategies will need to adjust to address the changing operating environment and higher ESG expectations.

“The sector urgently needs to address its expanding contribution to global emissions, so operators need advice along the entire real estate life cycle — from site selection to investment to facilities management — in order to address the sizable sustainability issues they face,” Mr. Street said.

Further, JLL Philippines Director for Capital Markets Charlie McNaught said that investment in data centers in the Philippines is seen to increase in the coming years.

“It is critical that more emphasis is placed on environmental considerations to ensure these newly developed assets are future-proofed,” Mr. McNaught said.

“The country is home to 76 million internet users who spend an average of more than 10 hours on the internet daily. This provides a solid base to fuel data consumption which is expected to further grow as we anticipate greater data demand in the future on the back of wider technology adoption,” he added.

According to JLL, the top strategic priorities for data centers in the next two years are becoming more sustainable and socially responsible.

“Driven by net-zero carbon ambitions, owners and operators will focus on technologies that reduce power consumption, minimize waste, and rely more on renewable energy sources to power this asset class. Approximately 50% highlight that they will implement artificial intelligence-powered cooling technology in their data center by 2023,” JLL said.

“Respondents also identified re-evaluating construction aspects of data centers as central to achieving climate neutrality in the future, particularly minimizing carbon-intense materials such as steel and concrete,” it added. — Revin Mikhael D. Ochave