Innovative water management: the future of data centres

Smart water management could also increase efficiency. Transitioning from traditional cooling to targeted cooling that focuses on individual rows of servers may be effective. Additionally, Google uses AI and machine learning to train deep neural networks in its data centres to optimise energy consumption.

As the complexity of the sector's water quality needs increases, opportunities for outsourcing water treatment are growing, creating opportunities for solution providers. Below are some examples:

Ecolab is a global leader in water treatment, hygiene and infection prevention solutions, with a particular focus on the industrial sector. Ecolab's 3D TRASAR Cooling Water programmes integrate smart sensor technology and industrial water treatment technology to optimise cooling systems. Ecolab has enabled a central water treatment plant, dedicated to data centre cooling, to save 2.9 million gallons of water annually translating to $15,532 in yearly savings. [2]

A global supplier of water equipment specialising in pumps, analytical instrumentation and wastewater technology, Xylem offers advanced water treatment solutions for data centres. A global hyperscale data centre utilising Xylem's solutions has achieved a 40% reduction in water consumption compared with traditional sand filtration methods and a 50% decrease in cooling tower maintenance. [3]

Organo specialises in process water and ultrapure water production, primarily serving the power and microelectronics industries in Taiwan and Japan. Over 60% of its sales come from the semiconductor-related water treatment business. Since installing its first water treatment facility in the early 2000s, Organo has been responsible for ultrapure water production and supply at nearly all TSMC*'s plants.

In addition to being essential to our daily activities, the infrastructure supporting digitalisation is crucial for achieving key societal goals, including increased financial inclusion and environmental sustainability. Emerging technologies, such as AI-driven water management systems, are set to play a significant role in reducing water consumption and enhancing the ESG performance of data centres.

Data centre companies in which L&G invests are among those pushing for positive change. For example, Kao Data*, a data centre developer and operator, is a signatory of the Climate Neutral Data Centre Pact, which sets out commitments to curb water usage, challenging the data centre industry to reach zero water use by 2030.[4]

To learn more about our approach and expectations concerning water, read our Water Policy.

As part of our series of blogs on this topic, our next instalment will explore how AI and data centres, despite their significant upfront water consumption, could ultimately contribute to water-saving innovations.

*For illustrative purposes only. Reference to a particular security is on a historic basis and does not mean that the security is currently held or will be held within an LGIM portfolio. The above information does not constitute a recommendation to buy or sell any security.

[1] Lenovo Story hub
[2] Ecolab company website
[3] Xylem company website
[4] https://kaodata.com/uploads/Kao-Data-ESG-Report-2023-24-v1.pdf