The New Data Center Playbook | Chapter 2: Managing Social Risk and Opportunity

Following the publication of our New Data Center Playbook, this article is the second chapter in a series of deep dives exploring the global market’s new race conditions for those investing in, developing, and operating data centers, and the steps needed to deliver capacity at the pace AI demand now requires.

This article looks at the scale of the challenge facing the data center sector regarding social and community risk factors and the lessons that can be learned from other industries that have faced similar challenges.

1.  Introduction – the changing landscape

Data centers are not a new concept. Plenty have been built over previous decades with comparatively little attention from the broader community. However, the scale and pace of AI innovation, and the corresponding surge in data center developments, has rapidly raised the sector’s profile. Data centers are now exposed to competing interests: realising the potential of AI and helping governments achieve economic growth objectives on one hand, while ensuring sustainable development that avoids  harm to the environment and host communities on the other.

Where data center developments may once have attracted little attention, they are now firmly in the spotlight. Larger and more physically prominent developments are confronting public awareness and prompting legitimate questions about land use, amenity, health and environmental impacts, particularly noise, energy and water consumption. Opposition is becoming increasingly sophisticated, often successfully delaying or stalling projects entirely. This heightened risk weighs heavily in a race where speed of deployment is paramount, and there is growing acknowledgement that the sector must improve its approach to understanding social risk through better community engagement as it seeks to maintain a line between national need and local impact. 

2. The Challenge – exponential increases in pace and scale of developments against a backdrop of differing stakeholder interests and value drivers

Community opposition to data centers is manifesting through vocal media campaigns, resistance to consenting processes and increasingly through direct legal challenge. The scale of the challenge is significant and growing ¹. In some jurisdictions, the data center sector has boomed so quickly that the rate of development has outpaced policy and the public sector response.

In the United States, more than US$170 billion in announced AI data center capacity has been blocked, withdrawn, or stalled by community opposition since January 2024 ². Between January and March 2026 alone, 75 US data center projects worth around $130bn were blocked or delayed, nearly as many as in the whole of 2025 ^{3 4}. In the United Kingdom and Australia, advocacy organisations are now also bringing challenges against planning decisions for data center schemes ⁵.  In the UK, the Government recently conceded in legal challenge proceedings that it had wrongly granted planning permission for a data centre without first securing measures that would have mitigated environmental impacts ⁶.  Meanwhile, Google’s proposals for two data centre campuses east of London have been criticised in the national press for understating the level of carbon each project will contribute to the UK’s overall climate goals (adding pressure and scrutiny to the associated planning processes for the data centers)⁷.

The number of community opposition groups is increasing worldwide as their tactics become more sophisticated ⁸. Data Center Watch research group suggests that in the US alone active opposition group numbers grew from 396 in 2025 to 833 in 49 states by March 2026 ⁹.  Amplified by media coverage, the result is an increasingly negative storyline and reputational impact (one of cover-ups, environmental fallout and scandal) that data center developers now must respond to.

Data center developers have an opportunity to learn from other sectors, such as energy, resources and infrastructure (even residential), who have had decades to build an understanding of how best to manage impacts, communicate benefits and navigate multi-stakeholder contexts.

3. Finding the balance to date

Initiatives aimed at striking the balance between the conflicting interests of developers, national governments and host communities have so far fallen into two broad categories: jurisdictional and project-specific initiatives.

Jurisdictional initiatives are largely government-led. Inherent in such initiatives is a tension between facilitating growth and protecting the environment and communities. The push for growth can be seen in steps such as the formulation of data centre policies, standardisation of data center regulations, targeted approval pathways and limiting infrastructure zoning restrictions; the pull of protection has seen measures to address legitimate community or stakeholder concerns such as bypassing or accelerating traditional planning processes and safeguards, such as including limiting energy and water use, managing impacts to local amenity, and reducing air and noise pollution. 

Examples of initiatives in different countries include:

• In the United States, the administration issued an Executive Order seeking to accelerate permitting for data centers and limit state-level interference in 2025 ¹⁰. However at the state level, some legislatures and counties have imposed temporary pauses on data centers ¹¹.  In New York, the governor signed an executive order in July 2026 establishing the first statewide, one-year moratorium on new development of hyperscale data centers ¹². Other states have taken additional significant interventions to control data center growth by imposing strict guardrails on energy use, environmental conservation, and local community impacts.
• Australia has recently announced their Expectations of data centres and AI infrastructure developers ¹³ guideline and a new Office of AI which will assist to develop a new Australia AI standard, including mandatory requirements for large AI data centers, including energy and water standards ^{14 15}.
• Singapore has lifted its construction moratorium and allocated limited energy capacity under strict sustainability conditions ¹⁶.
• The United Kingdom has introduced AI Growth Zones (areas that will benefit from accelerated grid connections, power pricing discounts, streamlined planning control and other investment incentives) as well as generally increasing the permeability of the planning process for data centers (thereby creating flexibility to accommodate power requirements) and updating national planning policy to be supportive of data centers. Pressure from environmentalists is contributing to more rigorous environmental impact assessment, the boundaries of which are being tested in the courts (as they are in other sectors) ¹⁷.
• The European Commission adopted the Cloud and AI Development Act (CADA) in June 2026 with the aim to triple the EU’s data centre capacity within the next 5 to 7 years and fully meet the needs of EU businesses and public administrations by 2035. The Act proposes to streamline the deployment of data centres by identifying suitable sites and simplifying permitting processes for projects meeting sustainability and innovation criteria. It also introduces a single EU-wide sovereignty framework to assess cloud and AI sovereignty ¹⁸. 

Project-specific initiatives are more granular and site specific. Projects that undertake early community engagement and increase transparency or commitments on environment, energy and water consumption, noise, and employment often face less opposition and lower project cancellation rates than projects announced without prior consultation ^{19 20}. Examples of initiatives deployed in the industry include:

• Engaging early and building feedback into decision making. Gaining an understanding of stakeholders by developing community engagement plans, and implementing transparent communication methods including digital feedback, town halls, representative focus groups, and advisory boards to inform project development and impact mitigations ^{21 22}.
• Being smart with design and planning to optimise efficiency and minimise impact. Adjusting designs to reduce land use or better integrate local biodiversity and landscape to reduce environmental and amenity impacts.  In the UK, we are starting to see sustainability measures extend from building fabric to internal compute, with prescribed Power Use Effectiveness (PUE) targets in some cases.
  
  The clearest example of this in the UK is the Old Oak and Park Royal Energy Network in West London, the UK’s first scheme to take data centre waste heat at scale.  It will recover 17 MW of waste heat from two data centre sites, eventually warming as many as 25,000 homes ^{23 24}.

• Implementing measures to reduce intensive cooling demands (e.g. closed loop systems and advanced air and liquid-to-chip cooling technologies) and other mechanisms for controlling the energy efficiency beyond the building fabric (e.g. internal computing hardware) and therefore reducing energy need, air pollution and reducing noise and ongoing project costs ²⁵.  In the UK, closed loop cooling systems are more common than the evaporative cooling techniques that were used historically in the US, but nevertheless the old US systems have tainted global public perception of water consumption by data centers in the UK and wider.   
• Prioritising a low emissions electricity supply.  In the UK and wider we are starting to see 100% renewable electricity supply being a requirement of planning control in some cases. Co-location of data centres with renewables (or nuclear) is a hot topic with private wire arrangements often a prerequisite to land and planning deals. Some schemes are also adding backup batteries to stabilize local power grids, allowing for further low emissions power to be added. These initiatives can be supported by communities and provide a long-term opportunity to minimise noise and air pollution from gas turbines and diesel generators ²⁶.
• Developing circular economy principles to make facilities future proof and reduce waste, including activities such as creating depot hubs to recover and repurpose data center equipment (e.g. servers and other components) ^{27 28}  .
• Financial compensation for individuals directly impacted by a project, community benefit sharing arrangements, and economic development commitments such as investing in local infrastructure, local jobs, training/education, and procurement opportunities ^{29 30.}

A successful project will deploy a combination of the jurisdictional and project-specific initiatives that are bespoke to its specific location.  As both jurisdictional and project-specific policies and initiatives emerge and mature, the projects best placed to succeed are those that navigate existing regulation, better communicate the sector's benefits and innovation, and manage stakeholder concerns, with one eye to the future to address emerging expectations.

4. What is the winning formula?

Success for the data center sector lies in listening to the individual needs of a host community as well as quickly learning the lessons from other industries. From our experience helping companies navigate this challenge we recommend the following:

Reframe data centers as infrastructure that supports national priorities: There is a significant education task ahead to help communities understand how data centers and AI underpin socially beneficial activities such as improving public health, cybersecurity, climate change and energy optimisation outcomes and emergency response systems. Communicating transparently on this intersection with broader public services (as well as how data centers are essential for the digital applications we all use individually on a daily basis) will help to build stronger community understanding and acknowledgement of the importance of data center infrastructure.

Work constructively with government to develop data center policies: Clear national policies do more than accelerate approvals. They set out the need case and locational requirements for data centres thereby narrowing the scope for tactical objections by giving decision-makers a clearer framework for balancing individual impact against public benefit. Engaging with governments and planning authorities to develop policy as regards data center development will promote the quickest route to achieving a balance of stakeholder's interests and therefore a smoother route to data center development.

Understand planning and development requirements: Ensure realistic planning and development approval needs are hardwired into project timeframes and design. Data center developers should understand the stakeholder landscape and factor this into project planning. They should also consider building time and resource contingencies to account for potential policy changes.

Engage early and transparently: Build stakeholder engagement into the regulatory approval strategy from the outset to understand individual community concerns and develop a bespoke engagement strategy. Actively managing potential environmental and social impacts and harm will help to keep projects moving towards successful completion ^{31 32}. Remember to continue engagement through the life of operations and establish feedback/complaints avenues to best manage community concerns before they escalate ³³. Be patient and persistent in building relationships. 

Look to learnings from other industries to support long term life of operation solutions: Ensure strategic planning incorporates social, reputation and environmental risk management and decisions for the long term, not just the immediate approval stage. A sustainable digital infrastructure enables the delivery of a resilient economy which is something communities want. A maturing industry will need to consider ways to mitigate their environmental and social footprint and actively maintain trust and acceptance by stakeholders over the life of operations. This includes ensuring that the commitments made to gain approvals are met and communication and engagement continues beyond completion.

Get creative, draw on the existing innovative skills within your company: Identify and champion technological breakthroughs to address the issues that communities living alongside data centers are raising. Learn from the innovative data center designs solutions already underway (discussed above) and encourage the development of initiatives that minimise impacts to the environment and local communities and embrace local context ³⁴. Working in this way will mean less objections and quicker developments.

Approached this way, community and social impact management is not simply a risk to be mitigated, but an opportunity to build the durable trust and maturity the sector will need as data center capacity continues to scale to meet the pace of AI demand.

Other Authors and Key Contacts: Becky Clissmann, Counsel.

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2. https://www.carbon-direct.com/research-and-reports/community-opposition-to-ai-data-centers-lessons-learned
3. 7 Ways Data Centers Affect US Communities | World Resources Institute
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28. atNorth: Heat Reuse Powers Mega Data Centre in Denmark | Data Centre Magazine
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30. https://www.sciencedirect.com/science/article/pii/S0301421526002090
31. $64 billion of data center projects have been blocked or delayed amid local opposition — Data Center Watch
32. https://www.aeic.gov.au/observations-and-recommendations/community-engagement
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