Can AI and Sustainability Reconcile? Analysing the Sustainability of Data Centre Companies in Light of AI Developments

Abstract

Following ClientEarth’s lawsuit against BlackRock in September 2024, asset managers’ sustainability practices have been put under increased scrutiny. This thesis examines these practices further, focusing on one of their most commonly held assets: large data centre companies such as Google, Microsoft and Meta. I assess how sustainable these companies are, and what impact their inclusion in sustainable financial assets has on sustainable investors. I find that the data centre companies cannot be considered sustainable and that their sustainability performance is deteriorating year by year. As a result, I conclude that even though these companies bring significant financial benefits, their inclusion in sustainable financial products is severely harmful to sustainable investors.