Data centers and the social license to build

Following the publication of the new data center playbook , this is the second in a series of deep dives exploring the global market’s new race conditions for those investing in, developing, and operating data centers.

This article examines the social and community risk factors facing data center developers and the lessons from other industries that have navigated similar challenges.

The changing landscape

Data centers are not a new concept but the scale and pace of AI innovation has rapidly raised the sector’s profile. They are now exposed to competing interests: realising the potential of AI and helping governments achieve economic growth on one hand, while ensuring sustainable development that avoids harm to the environment and host communities on the other.

Larger and more physically prominent developments are prompting legitimate questions about land use, noise, energy and water consumption. Opposition is becoming increasingly sophisticated, often successfully delaying or stalling projects in a race where speed of deployment is paramount. There is growing acknowledgement that the sector must improve its approach to understanding social risk through better community engagement.

The challenge

Community opposition to data centers is manifesting through vocal media campaigns, resistance to consenting processes and, increasingly through direct legal challenge. The scale of the challenge is significant and growing.

In the United States, more than $170 billion in announced AI data center capacity has been blocked, withdrawn, or stalled by community opposition since January 2024. Between January and March 2026, 75 US data center projects worth around $130 billion were blocked or delayed.

In the UK and Australia, advocacy organisations are now also bringing legal challenges against planning decisions for data center schemes, while Google’s proposals for two data center campuses east of London have been criticised for understating the level of carbon impact.

Community opposition groups are multiplying. In the US alone, active groups grew from 396 in 2025 to 833 in 49 states by March 2026. Amplified by media coverage, the result is an increasingly negative storyline to which developers must respond.

In many jurisdictions, development has outpaced policy. Data center developers have an opportunity to learn from other sectors, such as energy, resources and infrastructure (even residential), which have had decades to build an understanding of how best to manage impacts, communicate benefits and navigate multi-stakeholder contexts.

Finding the balance to date

Initiatives aimed at striking the balance between the conflicting interests of developers, national governments and host communities have so far fallen into two broad categories: jurisdictional and project-specific initiatives.

Jurisdictional initiatives are largely government-led, balancing the tension between facilitating growth and protecting the environment and communities. Examples include:

• In the United States, the administration issued an Executive Order seeking to accelerate permitting for data centers and limit state-level interference in 2025. At the state level, New York imposed the first statewide moratorium on hyperscale date centers and multiple states introduced strict guardrails on energy use, environmental conservation, and community impacts.
• Australia announced new guidelines for data centers and AI infrastructure developers and a new Office of AI to develop mandatory standards for large AI data centers.
• Singapore has lifted its construction moratorium and allocated limited energy capacity under strict sustainability conditions.
• The UK has introduced AI Growth Zones with accelerated grid connections and streamlined planning, while updating national planning policy to support data centers. Pressure from environmentalists is contributing to more rigorous environmental impact assessment, the boundaries of which are being tested in the courts.
• The European Commission adopted the Cloud and AI Development Act (CADA) in June 2026, aiming to triple the EU’s data center capacity within the next 5 to 7 years by streamlining permitting processes for projects meeting sustainability and innovation criteria.

Project-specific initiatives are more granular. Projects that undertake early community engagement and increase transparency on environment, energy and water consumption often face less opposition than those announced without prior consultation. Examples include:

• Engaging early and building feedback into decision making through community engagement plans, town halls, focus groups and advisory boards.
• Smart design to optimize efficiency and minimise impact, including waste heat recovery (such as Old Oak and Park Royal Energy Network in West London, the UK’s first scheme to take data center waste heat at scale, eventually warming up to 25,000 homes).
• Implementing advanced cooling technologies (e.g. closed loop systems implementing advanced air and liquid-to-chip cooling technologies) to reduce energy, water consumption and noise. The movement toward closed loop cooling systems is well underway across major US operators, pushed by the physical limits of air cooling at AI-era power densities.
• Prioritising low emissions electricity supply. In the UK, 100 percent renewable supply is increasingly a planning requirement, with co-location alongside renewables or nuclear a prerequisite to many land and planning deals.
• Financial compensation, community benefit sharing and economic development commitments such as investing in local infrastructure, local jobs, training.

The projects best placed to succeed are those that deploy a combination of these initiatives bespoke to their specific location, navigate existing regulation, and manage stakeholder concerns, with one eye to emerging expectations.

What does success look like?

Success for the data center sector lies in listening to the individual needs of host communities as well as quickly learning the lessons from other industries. Many key themes are emerging from projects that navigate community opposition most effectively:

Reframing data centers as infrastructure: There is a significant education task ahead to help communities understand how data centers and AI underpin socially beneficial activities – from public health to cybersecurity to emergency response. Developers that communicate transparently on this intersection are likely to build stronger community support.

Working constructively with government: Clear national policies do more than accelerate approvals. They set out the need for data centers, narrowing the scope for tactical objections and giving decision-makers a framework for balancing individual impact against public benefit.

Understanding planning and development: Developers that understand the stakeholder landscape and build time and resource contingencies into project planning, including for potential policy changes, are better positioned to avoid costly delays.

Engaging early and transparently: Building stakeholder engagement into the regulatory approval strategy from the outset is proving critical. Continued engagement through the life of operations and established feedback channels to manage concerns before they escalate are equally important.

Long term risk management: Strategic planning that incorporates social, reputation and environmental risk management for the long term, not just the immediate approval stage, is increasingly distinguishing successful projects. This includes ensuring that commitments made to gain approvals are met.

Getting creative with innovation: The most effective developers are championing technological breakthroughs to address community concerns. Learning from innovative design solutions already underway and embracing local context is yielding results. Fewer objections and quicker developments follow.

Approached this way, community and social impact management is not simply a risk to be mitigated, but an opportunity to build the durable trust and maturity the sector will need as data center capacity continues to scale to meet the pace of AI demand.

Co-authored by Charlie Reid and Laura Morton, partners at Ashurst Perkins Coie.