Countering the Environmental Impacts of Data Centers: Two Inspiring Member Perspectives

“A recent study by Social Change Lab looked at numerous AI harms to determine which would cause people to take action. The number one concern? Environmental harms.” Philip Eubanks, Executive Director, Climate Emergency Fund

The ‘hot topic’ at this year’s New York Climate Week is data centers. While most agree that data centers pose a host of pressing environmental, community, and democratic concerns; not everyone agrees on one unifying solution. Confluence is an eclectic network of foundations, family offices, public and private portfolio managers that doesn’t always agree – exactly – on solutions. That’s one of our community’s strengths. Productive dialogue is good for capitalism and great for the planet. 

This past month we engaged with members across institutional types to better understand varying perspectives on data centers. The Climate Emergency Fund is a funding intermediary and venture philanthropy that raises money for, and makes grants to grassroots climate groups. Elemental Impact is a non-profit investing platform that scales innovative climate technologies and infrastructure with deep local and community impact. 

Read more to better understand their inspiring viewpoints.  

The Trouble With Data Centers

The rapid rise of data centers – driven largely by the AI boom – is devastating the environment and our communities. As of 2026, 53 percent of Americans are extremely concerned about the environmental impacts of AI, and 78 percent are at least somewhat concerned.[1] The World Resources Institute, a Confluence member, reports that a single modern AI data center can use as much power as 100,000 homes and that large facilities can consume as much as 5 million gallons of water daily — comparable to usage by a small town. 

Insights from Environmental Defense Fund and Nuveen analysis explain that data centers embody everything that Americans fear about a future that we feel that we have little control over.[2] For communities, data centers are a menace driving up electricity costs, devastating water supplies, and fostering an atmosphere of political corruption and back door dealmaking. Noise is another concern reported by many communities already hosting facilities.

For institutional investors, the same companies that endowments depend upon for returns build the infrastructure that may threaten portfolio decarbonization goals. Confluence members wonder, “Are tech company holdings re-carbonizing our portfolios?” These are real discussions happening right now in the mission-aligned investing community alongside an outpouring of climate justice grantmaking at the local and State levels. 

The question looms: how can mission-driven and values-aligned investors reconcile investment in tech and AI companies that cause these devastating impacts?

Two Confluence member organizations – the Climate Emergency Fund and Elemental Impact – are tackling the issue in different ways. The Climate Emergency Fund is funding movements that aim to slow down and constrain the data center build-out, while Elemental Impact is working inside the system with the very companies driving the build-out to apply cleantech solutions to construction and operations. These differing strategies, both aim towards the long-term goals of addressing the environmental impacts of data centers. 

From an inspiring perspective, data center construction done right may be an unprecedented opportunity for renewable and clean tech advancement, as well as for community advocates.[3] Data centers could be model green industrial facilities utilizing the best innovative technologies available today; proving that we can be global tech, AI, and decarbonization leaders. This is more in alignment with what many communities want – alongside real local benefits and energy sharing. 

Confluence spoke with Philip Eubanks, Executive Director, Climate Emergency Fund and Dawn Lippert, CEO, Elemental Impact, to explore how they are tackling these tough issues. Read on to learn more about their work and what role your institution might play in addressing these urgent concerns.  

Philip Eubanks, Executive Director, Climate Emergency Fund

The Climate Emergency Fund increasingly supports global civil society movement building to tackle data centers. What do activists want to achieve, and how do you assess the movement thus far?

It’s not just about canceling data center projects. This is a movement at the intersection of democracy and climate. We need democratic control over decisions that are currently being made in secret. Communities want a meaningful say over their water, energy, land, and air. Most of these campaigns aren't anti-technology. They're asking an age-old question among democracies: who decides and for whose benefit?

The growth of the movement has been extraordinary. Opponents blocked or delayed at least 75 U.S. projects worth roughly $130 billion in the first quarter of 2026 alone, matching all of 2025 in three months. Active opposition groups more than doubled to 833 across 49 states, and the pattern is repeating in Ireland, the Netherlands, Chile, Uruguay, and Australia. About 40% of projects that face sustained local opposition are eventually cancelled or moved. For a movement running mostly on volunteer energy, that win rate is remarkable.

The challenge is that this is still hundreds of local campaigns rather than one connected movement. Groups form overnight, win or lose a zoning vote, and often dissolve. They face the best-resourced lobbying operations on Earth, and litigation designed to drain resources and intimidate leadership is part of the playbook. The opportunity is that modest resources can go extraordinarily far. Staff, legal defense, training, and the connective tissue between local groups would transform what this movement can do. That's precisely the gap Climate Emergency Fund exists to fill.

Community engagement is central to movement building. You state that people must have a meaningful say in decisions that reshape their communities, their energy systems, and their relationship to the natural world. Share more about what you hear from communities about data center build-out? What are the key concerns?

The concerns are strikingly consistent across the political spectrum, even when the emphasis varies. A recent study by Social Change Lab looked at numerous AI harms to determine which would cause people to take action. The number one concern? Environmental harms. It turns out, people care deeply about water and air, and it’s a politically unifying issue. There are numerous other reasons people show up for these concerns. Electricity bills, noise, farmland loss, and tax abatements that allow immensely profitable companies to avoid contributing to the communities they burden – the list goes on and on.

But underneath all of it is a deeper grievance about process. These projects are routinely negotiated in secret, behind NDAs and shell companies. People discover a data center is coming to their town overnight, with no meaningful consultation, and the sense that the decision has already been made is a powerful force. What moves me is who's showing up. Farmers, heritage preservationists, ratepayers, young climate activists, people who have never taken a public stand on anything. When neighbors who agree on almost nothing else pack a city council meeting together, that's democracy working exactly as intended, and it’s revealing who wants to stop that: Big Tech, Big Oil, and tiny-handed authoritarians.

Many foundations and impact investors in the Confluence network are genuinely wrestling with how to manage their tech holdings in light of the data center build-out. What would you want them to understand about the role values-aligned capital can play, and where do you see the most meaningful opportunity for that kind of investor right now?

I'd start with an honest accounting question. The companies driving this build-out are often deeply tied to the fossil fuel industry. Analysts have found that a handful of cloud contracts with oil and gas companies carry a greater emissions impact than a tech company's entire reported footprint. If those companies are in your investment portfolio, you’re enabling this. But, investors have leverage the rest of us don't. They can demand disclosure on water, energy sourcing and fossil fuel contracts, and push for community consent.

But the most meaningful opportunity right now is on the granting side. The single highest-leverage move available is funding the communities organizing for accountability. These groups are winning against the best-resourced companies in the world with almost no money. General operating support, pooled legal defense, and organizer training cost very little and are transforming what this movement can achieve. And this is constitutionally protected, ‘small-d’ democratic activity. For a funder weighing risk, it's hard to imagine a more defensible grant with a higher return.

Dawn Lippert, CEO, Elemental Impact

The Data Center Innovation Initiative (DCII) brings together Elemental with Amazon, Google, Meta, and Microsoft at a moment when data centers are facing serious scrutiny for their environmental and community impacts. What made this the right moment to launch, and how do you think about Elemental's role as both a climate investor and a partner to the companies driving that buildout?
 
 We launched the DCII because data centers are being built quickly, raising real concerns about their impact on energy, water, land and communities. At the same time, entrepreneurs see data centers as a promising path to commercialization for cleaner energy, cooling, water, and materials technologies.

Elemental has spent more than 17 years helping founders move from pilot to real world deployment. We kept hearing from founders who wanted to work with data centers, especially as the world’s largest technology companies became some of the biggest buyers of clean energy. We wanted to bring both sides together so entrepreneurs could better access major customers – and we could help the strongest solutions reach the market.

Through the DCII, Amazon, Google, Meta, and Microsoft share where their biggest needs are and help identify, evaluate, and site potential projects. Elemental remains the investor and makes the final decision about which projects to support. Since we’re a non-profit, our investment decisions are completely driven by environmental and social benefit. We’re not funding the data center expansion itself; we’re helping entrepreneurs get new technologies incorporated into built alongside data centers, with environmental and community impact considered from the start.

Elemental reports that 98% of companies in your portfolio say community partnerships are central to project success, and the DCII includes explicit commitments to workforce development and local stakeholder engagement. How do you ensure those commitments hold when your corporate partners are operating at hyperscale, and what does genuine accountability to communities look like in practice?

Elemental’s DNA is that technology is half the solution—community is the other half. One without the other simply doesn’t work. Local alignment is essential to project success in the long term. We work closely with entrepreneurs and startups to engage communities early, understand concerns and work diligently to design projects with tangible local benefits. The DCII is no exception.

We designed the initiative with our partners so environmental and local impact are considered from the very beginning. We’re looking for innovation with measurable results. For example, cooling technologies that can reduce water use by 80%. The best solutions can reduce the impacts communities experience directly, from noise to land use.

Our work with Fervo shows what community benefit can look like in practice. We provided capital and support to help the company launch a geothermal apprenticeship program with Southern Utah University, creating new career pathways for local workers as Fervo grows. Its Cape Station project is also expected to create 160 full-time operational jobs, bringing lasting economic opportunity to the region. 

Trust has to be earned locally, community by community, and we have an opportunity to build in a different way from the infrastructure of the past. 

Many foundations and impact investors in our network are genuinely wrestling with how to think about their tech holdings in light of the data center build-out. What would you want them to understand about the role values-aligned capital can play, and where do you see the most meaningful opportunity for that kind of investor right now?

As an environmentalist, I’m profoundly grateful for everything the environmental movement has fought for: protecting people and the planet still matters. But this moment calls us to build the solutions we need for the future.

Here’s a number that’s been informing our strategy at Elemental: more than 35% of the emissions cuts we need by 2050 will come from technologies that still require innovation to scale. The data center buildout is accelerating demand for exactly this kind of innovation.

This is where values-aligned capital matters most. Philanthropy has a unique ability to take early risk, shape markets, and help technologies cross the commercialization gap that traditional capital often avoids. Remember, solar, batteries, and electric vehicles were once considered risky, untested, and controversial. Now they’re proven to be better, faster, and cheaper than the alternatives they replaced.

That same catalytic support is needed now for advanced electrical systems that improve grid efficiency and resilience, novel industrial cooling that cuts energy and water use, and low-carbon materials that lower the footprint of new construction. The time is now to help entrepreneurs build early commercial projects that prove what’s possible for the future.

Confluence Call to Action: Determine Your Approach to Tech and AI Investing

We're asking every values-driven institution to outline your approach to technology and AI holdings in your investment policy statement, which can help support the work of the Climate Emergency Fund and Elemental Impact. At the end of this process, Confluence’s vision is for member institutions to have revised investment policy statements that clearly and emphatically reflect your approach to tech and AI investing. Read more

Learn more

Read more about AI impacts and the role of values-aligned investors:  

• Work is a Human Right 
• We’re Not Opposed to AI – But It Must Protect Our Worlds 
• Call to Action: Determine Your Approach to Tech and AI Investing 

In addition, Confluence members will further explore the topics in this blog at Confluence Overview Effect’s upcoming Virtual Climate Solutions Town Hall, on September 30th. Look for an invitation in your inbox and register soon!