Cities press for standards on data centres

Forty-nine cities are backing a pact that calls for data centres to use resources efficiently, protect residents from rising costs and deliver benefits to the communities hosting them. Twenty-two of the cities are in the US, according to C40 Cities, which brought city, finance and industry representatives together during New York Climate Week to discuss how the principles could shape investment.

The Global Urban Data Centres Pact was co-founded by Kate Gallego, Mayor of Phoenix, and Nick Reece, Lord Mayor of Melbourne. Launched in June, it sets out four principles: developments should fit into cities’ plans, use resources sustainably, involve local communities and help reduce residents’ costs while sharing economic benefits.

Speaking about the need for shared standards for data centre development, Gallego said: “US cities are at the forefront of defining the next era of digital growth and urban development. It’s essential that we work to ensure our cities, and our peers around the world, establish a standard for how our residents get the benefits of the AI and digital economy while protecting the communities that make that growth possible.”

C40 says the expansion of data centres has raised concerns about pressure on electricity grids and water supplies, as well as pollution, health risks and energy bills. Some local governments have temporarily paused developments while deciding how future projects should proceed. The pact gives cities a shared basis for setting expectations with developers and investors before proposals advance.

Gallego said: “The Pact offers a clear framework for collaboration among cities, investors and industry. By setting expectations now, we can create greater certainty for responsible investment and support innovation that strengthens our economies and improves quality of life.”

At a meeting co-hosted by C40 and the Global Real Estate Sustainability Benchmark (GRESB), US city representatives joined investors, lenders and developers to discuss how projects could address environmental and community risks. C40 argues that clear expectations could help direct finance towards proposals more likely to win city approval.

Kate Johnson, C40 Cities Director for North America, said: “Instead of closing the door on data centres, [mayors are] raising the bar. Where cities have paused development, now is the moment for mayors, investors and industry to agree on the rules that allow the right projects to go ahead but only if they work for communities and the planet.

“When those pauses end, we want investment flowing into cleaner, more efficient data centres that communities can support. The Pact gives cities and investors a practical blueprint for making that happen.”

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