Series "The data center through an investor's eyes" · Stranded asset · Article 9 · PUE and value · Retrofit
A data center uses a lot of electricity, and an AI data center even more. For an Article 9 fund, whose stated objective is sustainable investment, the "AI" story is not enough. It must show, with evidence, that the asset contributes to an environmental objective, does no significant harm to others, and will keep doing so over the whole holding period. Here is the framework and what to check.
WHAT ARTICLE 9 REQUIRES
The EU SFDR regulation classifies as Article 9 the financial products that have a sustainable investment objective. In practice, each investment must contribute to an environmental or social objective, do no significant harm to other objectives, and follow good governance practices. The reform under way, proposed by the Commission in November 2025, would replace Articles 8 and 9 with categories ("sustainable", "transition", "ESG basics") with a 70% portfolio threshold. The Council adopted its position in June 2026; Parliament has not yet finalised its own. Whatever the outcome, the logic stays the same: you will have to prove, not claim.
THE ANCHOR: EU TAXONOMY ACTIVITY 8.1
The EU taxonomy defines which activities count as sustainable. Data centers fall under activity 8.1, "data processing, hosting and related activities". To contribute substantially to climate change mitigation, the operator must in particular:
Have this implementation verified by an independent third party, with an audit at least every three years
Use refrigerants with a global warming potential not exceeding 675
Meet the "do no significant harm" criteria: climate adaptation, water, circular economy for equipment
The European Code of Conduct, run by the Commission's Joint Research Centre, lists data center best practices: air management, set-point temperatures, equipment choices, metering, heat reuse. It is what turns intent into audited evidence. The Commission plans to revise these criteria and the Code may evolve into a maturity model: a fund should check current compliance, but also the operator's ability to keep up.
REPORTING AND THE RATING SCHEME
Since 2024, data centers above 500 kW must report their indicators every year (energy, PUE, water, heat reuse, renewable share) to an EU database under the Energy Efficiency Directive. On 21 September 2026, the Commission proposed a common rating scheme, with sustainability labels expected from 2027, and launched a consultation on minimum performance standards. For a fund, this is good news: evidence becomes comparable across assets. It is also a risk for poorly placed sites.
PROVING IT OVER THE WHOLE HOLDING PERIOD
The trap is to judge the asset at acquisition date. An AI data center will densify, change tenants and replace equipment. Its indicators will move. The case must therefore rest on a trajectory:
| Indicator | What it measures | What to require |
|---|---|---|
| Annual measured PUE | Total energy / IT energy | 12-month measured value, not design value, and a target trajectory |
| Carbon intensity of power | Emissions from electricity used | Low-carbon or renewable supply contracts over the period |
| WUE | Water per IT kWh | Cooling choice, closed loop, measured data |
| Heat reuse (ERF) | Share of heat reused | Feasibility study, a real offtaker (heat network, industry) |
| Refrigerants | Warming potential of fluids | Inventory and replacement plan |
| Backup generators | Fuel and running hours | Alternative fuel, limited testing |
| Embodied carbon | Emissions from building and equipment | Life-cycle assessment, materials |
France starts with a real advantage: some of the lowest-carbon electricity in Europe. But that does not replace evidence: a poorly run French asset can rate worse than a well-run Nordic one. And in absolute terms, a densifying site uses more power: track both intensity and totals.
EVIDENCE TO REQUEST BEFORE INVESTING
Annual filings to the EU data centre database
12-month measured PUE and WUE, with the measurement method
Power contracts and their origin over the planned holding period
Refrigerant inventory and replacement schedule
Heat reuse study and any commitment with a heat network
Physical climate risk assessment of the site (heat, water, flooding)
This evidence must then be written into the investment documentation: indicators tracked every year, third-party verification, an action plan if the trajectory slips. That is what lets a fund defend its classification to its own investors. See also stranded asset risk and our offer for lenders and funds.
Sources: Regulation (EU) 2019/2088 (SFDR); Commission proposal of 20 November 2025 and Council mandate of 24 June 2026 on SFDR reform; Delegated Regulation (EU) 2021/2139, Annex I, activity 8.1; European Code of Conduct on Data Centre Energy Efficiency (JRC); Directive (EU) 2023/1791 and Delegated Regulation (EU) 2024/1364; European Commission, 21 September 2026. This article is not legal or regulatory advice.
FREQUENTLY ASKED QUESTIONS
Can a data center be aligned with the EU taxonomy?
Yes, under activity 8.1, if it implements the expected practices of the European Code of Conduct, verified by an independent third party, uses low-GWP refrigerants and meets the do-no-significant-harm criteria.
Can an Article 9 fund invest in an AI data center?
Yes, provided it can evidence the environmental contribution and the absence of significant harm, and tracks these indicators throughout the holding period.
Which indicators should be tracked for a data center?
At minimum annual measured PUE, water use (WUE), share of heat reused, origin of electricity, refrigerants and embodied carbon.