Hong Kong at the Centre of APAC’s Data Centre Boom
Hong Kong is not merely the financial engine of APAC’s data centre story, it is increasingly where the assets are being built too. The city currently operates 581 megawatts (MW) of data centre capacity, with more than 400 MW of additional capacity under construction or in planning stage, making it one of the largest active pipelines in Asia Pacific. At the same time, Hong Kong-based private equity funds, infrastructure investors, and asset managers are backing projects across Southeast Asia, with facilities being built and operated in Johor, Batam, Jakarta, Ho Chi Minh City, Manila, and beyond.
ASEAN now accounts for over half of Asia-Pacific’s total data centre pipeline, driven by AI workloads, cloud adoption, and digital government programmes across six rapidly growing markets. Hong Kong sits at the intersection of these two trends: a market with its own significant build-out underway, and a strategic capital hub financing expansion across the wider region. What recieves less attention in both contexts is what it actually takes to develop and operate these assets responsibly, and why that perspective carries real commercial and financial consequences for investors, developers, and operators alike.
Data Centres Are Resource-Intensive Assets. That Creates Real Investment Risk
A data centre is not a passive infrastructure asset. It consumes large amounts of electricity around the clock, requires significant volumes of water for cooling, and generates ongoing waste through hardware cycles and construction. In a region where sustainability frameworks are still catching up with the pace of investment, these factors create exposure that surfaces at financing, refinancing, and exit.
Three dimensions consistently drive the environmental and Environmental, Health and Safety (EHS) risk profile of data centre assets across ASEAN.
Energy and carbon exposure sit at the top of the list. Electricity accounts for 60 to 70 percent of a data centre’s total operating costs. In markets where power grids still rely heavily on coal and gas (such as Indonesia, Vietnam, and the Philippines), high operating cost comes with a significant carbon footprint attached. Hong Kong’s own data centres consumed 7,131 terajoules of electricity in 2023, a figure that has risen by more than 75 percent over five years, and the pipeline of new facilities will push demand considerably higher. Lenders and co-investors across the region are increasingly required to assess and report on this exposure. Access to renewable energy through corporate power purchase agreements or green tariffs exists in some markets and not others. For investors and developers conducting ESG due diligence, understanding where an asset sits on that spectrum is now a baseline expectation.
Water consumption is the risk that most investment teams underestimate. Cooling systems are a primary source of water use, and a single mid-size data centre can consume over one million litres of water per day. Most facilities across APAC operate in areas classified as experiencing high water stress, yet systematic tracking of water usage remains limited across many markets. The practical consequence for investors is that water risk is frequently undisclosed rather than managed, a gap that changes the asset’s risk profile as regulatory scrutiny increases and lender requirements evolve.
Waste and hardware lifecycle are the dimension moving most quickly up the ESG agenda. Hardware refresh cycles generate electronic waste, while construction materials carry embodied carbon costs that are increasingly required to be accounted for. Extended Producer Responsibility schemes for Information & Communication Technology (ICT) equipment are already in place in Singapore and moving up the policy agenda across the region. For investors working to achieve disclosures aligned with Scope 3 emissions, this is no longer a secondary consideration.
Why do energy, water, and waste matter specifically for APAC data centre investment?
These three dimensions matter because they determine whether an asset is well-positioned for the long term or carrying latent risks that will surface later. A facility without a credible renewable energy pathway carries growing Scope 2 liability. A facility without water monitoring is exposed when regulators or lenders require performance data. A facility with no hardware lifecycle policy is behind on what institutional investors are beginning to require at the point of capital deployment. Addressing all three early, at the planning stage, not the operations stage, is what separates assets that hold their value from those that require remediation.
What Responsible Development Looks Like Across the Project Lifecycle
Addressing energy, water, and waste risk is not a one-time exercise at the point of regulatory approval. The -priorities shift at each stage, from site selection and permitting, through construction management, to ongoing operations, and the answers at each stage determine whether environmental and EHS risk is being actively managed or simply deferred. For investors, the due diligence process needs to reflect that full lifecycle, moving beyond a mere snapshot at the point of capital deployment.
The Regional Picture Is Not Uniform
One of the most common gaps in data centre ESG assessments is treating APAC as a single regulatory environment. Environmental permits, grid emissions, water availability, and construction safety standards differ considerably across Indonesia, Malaysia, Vietnam, the Philippines, Singapore, and Hong Kong. For investors with multi-market asset portfolios, these differences necessitate advisors who combine local knowledge with international standards.
ESC has supported data centre developers and operators including Microsoft, AirTrunk, Princeton Digital Group, and Amazon across Asia Pacific. As the ESG consultant commissioned to lead the ASEAN Guide on Sustainable Data Centre Development, the region’s first government-backed sustainability framework for the sector, ESC brings the regional depth and on-the-ground experience that the rapidly growing data centre sector across Asia Pacific demands. With teams based in Singapore, Malaysia, Indonesia, Hong Kong, Vietnam, the Philippines, and India, ESC supports data centre investors, developers, and operators with environmental planning and permitting, EHS due diligence and risk management, and sustainability strategy across every stage of the asset lifecycle.
If you are investing in, developing, or operating data centre assets in APAC, contact ESC to discuss how we can support your requirements.