The Human Side of Data Centres: Social and Community Impact

This sixth article in our Data Centre Thought Leadership series explores the importance of social impact and performance in data centre development.

Why Social Impact Matters in Data Centre Development

Data centres are the backbone of the digital economy, powering cloud computing, artificial intelligence, and the rapid expansion of data-driven services. However, this digital growth comes at a cost. As more data centres are constructed, they place increasing pressure not just on local grids and water systems, but on the communities that host them.

As data centre development rapidly expands across the globe in response to the uptake in digital usage and digital infrastructure development, it is essential to recognise that these facilities must not be seen as passive infrastructure. Like energy, waste, and transport projects, data centres carry material social risks if engagement with impacted communities is not strategic and planned.

Many of these assets are being constructed in regional communities that are already heavily burdened with hosting major infrastructure such as renewable energy assets. This raises important questions: What is the cumulative social impact of data centres in these regions? And how will we manage and mitigate these impacts in places that have historically borne the costs of infrastructure without seeing proportional benefits?

Lessons from renewable energy

Drawing on lessons from the renewable energy sector, data centre proponents who fail to engage early with communities, especially in peri-urban or rural areas, risk delays, opposition, and cost escalation. Many communities are already fatigued by the pace and scale of renewable energy and infrastructure development in their regions. Resistance is often triggered by perceived exclusion, lack of local benefit, or poor transparency in planning. Projects are often viewed as imposed, rather than co-developed and frequently encounter regulatory and reputational issues, increasing project risk at both planning and operational phases.

Regulatory and ESG Compliance

Effective social risk management is increasingly mandated. From 2025, mandatory climate-related financial disclosures require large companies to account for ESG risks, including social impact. In addition, state-based planning laws often demand proponents demonstrate social value creation and meaningful community engagement. A compliance-driven or superficial approach is insufficient; poor social performance can lead to regulatory pushback, stalled approvals, and operational vulnerabilities.

Building and Maintaining Community Acceptance

Social licence is not a one-off transaction or entitlement, it is a dynamic form of community acceptance built through trust, transparency, and responsiveness. For data centres, this means engaging with affected communities to understand expectations, demonstrate local value, and respond to concerns. Developers can mitigate risks and support long-term viability by:

• Developing skilled jobs and career pathways in these sectors.
• Applying circular economy practices, such as reusing waste heat and designing for energy efficiency.
• Supporting critical infrastructure, such as health and education systems, through strengthened digital capability, connectivity, and continuity of services.
• Minimising local environmental impact, especially on water, land, and energy resources.
• Strengthening digital disaster resilience and ensuring backup systems for social infrastructure such as hospitals, emergency services, and government functions.

Respecting First Nations Right and Interests

Data centre developments must consider the rights, interests, and aspirations of Aboriginal and Torres Strait Islander peoples, particularly when projects intersect with Country or occur near culturally significant sites. This includes recognising traditional custodianship, engaging early and identifying opportunities for shared benefit.

Examples from Canada show how Indigenous leadership in digital infrastructure can reshape outcomes. The Indigenous AI Data Centres initiative, led by Indigenous communities in Canada, aims to establish sovereign data centres that are locally owned and culturally aligned (1). These centres are designed not only to deliver employment and digital skills development, but to embed principles of digital sovereignty and economic self-determination.

Environmental Concerns and Public Education

High water and energy use remain significant public concerns, particularly as AI adoption accelerates. Each AI query, image generation or interaction relies on high-density servers, which draw substantial electricity and require intensive cooling. Research estimates that training large models like GPT-3 can consume millions of litres of fresh water. Even running 10 to 50 queries can require up to 500 millilitres of water, depending on location and infrastructure (2). Without a clear, trusted explanation of how environmental risks are being managed, including energy sourcing, water recycling, and system efficiency, public concern may grow. There is an opportunity for the industry to coordinate public education campaigns, to explain how data centres operate and how they contribute to broader digital and decarbonisation objectives.

Employment and Local Economic Benefit

While operational phases of data centres require relatively few ongoing staff, construction provides a more tangible local benefit, particularly for electricians and skilled trades. These opportunities should be leveraged through targeted local procurement strategies and investment in training and upskilling programs to build regional capability and support workforce development. Community education initiatives also play a vital role in building understanding, early career interest, and social acceptance.

A leading example comes from Data4, a European data centre operator with campuses in France and five other countries. At its Paris sites, Data4 hosts around 100 local students per campus each year for structured education sessions that introduce students to the data centre sector, environmental considerations, and digital infrastructure careers. These visits are paired with hands-on learning and climate literacy, helping demystify the industry while fostering community connection. The company also supports local economic participation through supplier ‘speed-dating’ programs for small businesses and public events like outdoor cinemas and festivals, helping position the data centre as a visible, valued part of the community (3).

Reframing Data Centres

Data centres are often misunderstood as remote or secretive industrial sites. In reality, it underpin services people use daily: Medicare access, online banking, digital learning, and cyber defence. Public education can reframe these assets as enablers of digital resilience and productivity, but contributors to healthcare, productivity, and national infrastructure.

This also includes highlighting innovation in how data centres are powered. Other articles in this series have explored how low carbon power generation can support data centre development. In Tasmania, for example, emerging projects are exploring the use of geothermal energy to power high-performance computing and AI-driven data centres. Companies are investigating how to convert existing geothermal wells into power generators for energy-intensive facilities, helping to decarbonise digital infrastructure while strengthening local energy resilience (4).

There is a significant educational task ahead to help communities understand not just what data centres are, but how they underpin many of the services we all rely on. This includes AI capability, cybersecurity, public health infrastructure, and emergency response systems. They are not just technology hubs; they are digital infrastructure enablers, providing continuity for hospitals, schools, emergency services, and national security. Importantly, the data demands of these services will only grow, and data centres will increasingly depend on renewable energy projects to meet sustainability goals. The intersection between these sectors must be communicated transparently to build trust and alignment with public expectations.

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References

[1] https://www.technologycouncil.ca/news/the-ai-landscape-in-canada-a-critical-moment-for-first-nations/

[2] https://oecd.ai/en/wonk/how-much-water-does-ai-consume

[3] https://www.datacenterdynamics.com/en/opinions/how-data-centers-can-become-pillars-of-the-local-community

[4] https://www.solutionenergy.com.au/