Creating opportunities for green data centres through a value chain approach
The rapid expansion of data centres (DCs) in Singapore and Southeast Asia could undermine climate goals unless sustainability is addressed across the entire value chain.
This was one of the key points made by SMU Professor of Urban Climate Winston Chow, together with colleagues Dr Felicia Liu from University of York, Dr Karen Lai from Durham University, and Mr Bertrand Seah from Paia from CBRE (the sustainability consultancy bought over by the global real estate specialists) – in a recent research paper.
Their study, “Decarbonising Digital Infrastructure and Urban Sustainability in the Case of Data Centres”, published in npj Urban Sustainability in April 2025, calls for a coordinated approach spanning policy, technology, finance, infrastructure, and skills development.
Supported by the Singapore Green Finance Centre, the research combined field-based data collection and workshops in Singapore to ground its findings.
Partial impact as the status quo
Current efforts to green the sector focus largely on what is easiest to measure — metrics like energy use per rack, cooling efficiency, or operational carbon output. These approaches, Professor Chow notes, overlook deeper environmental costs tied to construction materials, retrofits, and decommissioning.
“Typically, governments regulate what’s easiest and visible. Industry avoids risk and cost. Financiers fund what’s measurable and low friction,” he says. “This patchwork and piecemeal approach is not enough for real climate impact. A full-system, value chain-wide strategy is needed to green the digital economy.”
This fragmented approach also leaves older “brownfield” data centres — often 15 to 20 years old — outside the scope of meaningful regulation or incentives for retrofitting, despite their long remaining lifespans.
Rising demand and deepening impact
Driven by artificial intelligence, FinTech, and broader digitalisation, demand for DCs in ASEAN is projected to grow by up to 20 per cent annually through 2028, This growth places increasing strain on energy, water, land, and carbon budgets, particularly in space-constrained Singapore.
Furthermore, established hubs like Singapore, Dublin, and London are often preferred due to their connectivity, data sovereignty, and reliability advantages. Without regulatory shifts, this clustering locks in high-carbon infrastructure and hinders the low-carbon transition.
The five pillars of the value-chain strategy
Professor Chow and his colleagues outlined five interconnected domains that must be addressed, beyond isolated efficiency fixes: technology and innovation; policy and regulation; finance and incentives; infrastructure and energy supply; as well as people and capacity building.
When it comes to technology and innovation, the lifecycle of DC design — and operation — must be reimagined. From low-carbon building materials to energy-saving software adjustments, such innovation should include benchmarks for embodied carbon, materials, and future adaptability in faculties of both greenfield (built on previously undeveloped land) and brownfield (redevelopments of existing builds) types.
In the area of policies and regulation, Professor Chow shared as an example how Singapore’s Green Mark emphasises energy efficiency but does not require retrofits for older assets or lifecycle metrics. By embedding requirements for emissions across the construction, operation, retrofit, and disposal phases of facilities, such regulatory gaps can be closed.
When it comes to finance and incentives, investment flows currently favour new construction over upgrading existing sites. Brownfield retrofits hold untapped potential but lack financing mechanisms. One of the suggestions by Professor Chow and his team is that financiers adopt performance-linked terms such as tying interest rates to sustainability outcomes, or introducing “step-up” clauses that penalise missed targets.
As for infrastructure and energy supply, Singapore’s lack of space for solar and its reliance on natural gas makes achieving renewable energy goals difficult domestically. Professor Chow recommends building regional renewable grids across ASEAN, allowing energy imports to support tropical temperate data centres — helping Singapore maintain its edge while reducing carbon dependency.
Finally, touching on people and capacity building, the paper states that stakeholder resistance — whether in industry or from clients — often stems from risk aversion. To combat this, the team suggested coordinated training programmes and best-practice standards to increase awareness and technical skill among operators, investors, and developers, enabling safer adoption of efficient technologies and procedure.
Going from piecemeal to purposeful measures
Professor Chow’s recommendations align with Singapore’s ambition to be a leader in tropical urban sustainability. With its regulatory capacity, technical expertise, and potential to integrate with an ASEAN-wide renewable grid, Singapore is well-placed to model how tropical data centres can grow responsibly.
“For real climate impact, a full-system, value chain-wide strategy is needed for the credible greening of the DC sector,” says Professor Chow.
The study concludes that sustainability in digital infrastructure will not happen by accident. It requires deliberate alignment of policy, finance, technology, infrastructure, and education, guided by rigorous lifecycle metrics. In place of regulatory patchwork, Professor Chow calls for ecosystem-wide standards that ensure the digital economy supports, rather than undermines, climate goals.
If Singapore and its regional partners follow this roadmap, the expansion of data centres could shift from being a climate liability to a platform for global leadership in sustainable digital growth.
