How Big Tech can move the needle on water stewardship

This is the last of a four-part series taking a closer look at how 72 companies in four industries — beverage, apparel, food and high-tech — performed in Ceres’ Valuing Water Finance Initiative Benchmark report, which assesses how companies are valuing and acting on water as a financial risk and driving the systemic changes needed to protect freshwater systems around the world.

Technology evolves quickly, and nothing underscores this more than the explosion of artificial intelligence. While AI can help us solve many sustainability challenges, we can’t overlook its downsides such as the impacts it’s having on water supplies.

Data centers, the backbone of the digital economy and AI, are already among the top 10 water-consuming sectors in the U.S., using massive amounts of water to cool servers and indirectly relying on water for electricity generation that powers the facilities. 

This heavy reliance on increasingly stressed and polluted water resources exposes the tech industry to significant financial risk. A Ceres report benchmarking corporate water stewardship practices highlights commitments from some of the world’s largest tech companies working to address this risk, mainly in their own operations. For instance, Google’s 2030 goals include replenishing 120 percent of the freshwater it consumes on average across its offices and data centers. 

As AI growth continues to rapidly escalate, companies will need to innovate, deploying leading industry practices to meet their commitments — and in many cases expanding the scope and scale of them, including by placing a lot more emphasis on their supply chains. 

And investors will be paying attention, including those engaging directly with tech companies on water stewardship through the Ceres Valuing Water Finance Initiative. These investors are encouraging companies to build impactful water management strategies that mitigate risk and target the thirstiest parts of their value chains.

Innovative solutions

The health of water supplies varies across the globe, so it’s critical companies consider local watershed conditions and prioritize solutions for operations and suppliers in high water stress areas. 

Google’s approach to this challenge includes a Water Risk Framework that assesses the level of water risks in watersheds where existing and planned data centers are located. This helps guide water risk mitigation based on local information and insights. In the Netherlands, for example, Google is partnering with utility provider North Water to treat water from a canal, reducing the company’s reliance on groundwater supplies at risk of saltwater infiltration, due in part to excessive groundwater pumping.

Some tech companies are reusing and recycling water to help cut back on their water withdrawals to help account for production increases.

Amazon Web Services has set a goal to be water positive by 2030. That means the company is aiming to return more water to communities than it uses in direct operations. As part of this effort, Amazon Web Services is finding ways to return non-contact cooling water — water that absorbs heat without being contaminated by the substances being cooled — to the community for irrigation and other purposes. 

In addition to reusing and recycling water, companies such as Microsoft are also harvesting rainwater to help offset cooling and humidification needs at some data centers in Europe and is including the technology in designs for new data centers in Europe, Canada and South Africa.

The role of AI

Microsoft is also leveraging AI to support its water goals. The company has partnered with AI solutions provider FIDO Tech to provide AI-driven leak detection and water-use monitoring technology for aging water management systems in England, Mexico and the U.S. Another project supported by Microsoft will use AI data to provide tailored irrigation schedules to decrease groundwater pumping and diversion of surface water on farms in Chile. 

When it comes to water, companies’ AI strategies must consider both opportunities and growing risks. AI isn’t just ramping up water demand in companies’ data centers and operations, it’s also accelerating demand for water in supply chains, especially those producing semiconductors that power the technology.

Semiconductor supplier Broadcom (a company not assessed in the benchmark report) is among companies working to address this. Broadcom, which outsources 84 percent of its chips to third-party manufacturers, says its top manufacturers have implemented water conservation measures, including using reclaimed water in the semiconductor fabrication process. Sourcing policies and commitments that hold suppliers accountable for addressing water risk — a leading practice across industries — would strengthen and increase the impact of these efforts. Water use and pollution in the mining of precious metals for semiconductors is another key area that needs Big Tech’s close attention.

Preparing for the future

Tech companies have made some notable inroads on water stewardship. But the rise of AI has shined a spotlight on the fact that companies need to work harder to reduce their expanding reliance and impacts on water; this includes prioritizing water risks in their supply chains and impacts to clean water supplies for communities and ecosystems throughout their value chains.

Investors and other stakeholders are increasingly asking tech companies to assess and disclose more about their water-related financial risks and their actions to protect their business. They will also be looking to companies to continue leaning into innovation while drawing from leading practices from within and outside of their industry to fill critical gaps in their water stewardship strategies. 

The next iteration of Ceres Valuing Water Finance Initiative benchmark analysis, slated for fall 2025, will shed light on how tech companies are making progress and if it’s enough to keep pace with their quickly evolving technologies and water demands, particularly in high-risk watersheds.