Community-Centric Approaches To The Development Of Data Centers

As the rapid construction of data centers continues to generate backlash from local communities, environmental and human rights issues underpinning sustainable corporate practices are coming to the fore. Grassroots resistance is springing from rational fears – namely, that technology companies will benefit while communities bear the burden of higher energy costs, water scarcity, air pollution, noise.

Some data center projects have been accompanied by generous community subsidies and payments from tech companies spearheading their construction. Communities, however, are demanding more than just a payout. As the Fourth Industrial Revolution unfolds at breakneck speed, activist groups want to shape the design of the same digital technologies on which communities are becoming increasingly reliant – with many having absorbed the brunt of past industrial revolutions and their ensuing impacts. Beyond financial and other material benefits, communities want safeguards in place to insulate them from potential harms and believe that tech companies, like any other business enterprise, need to secure a social license to operate that only affected rightsholders can provide.

In a 2025 blog post, we addressed how market-dominant governments are re-embracing neoliberal deregulation of industry, while other stakeholders (shareholder activists, socially-conscious investment firms, retirement fund/pension administrators, and civil society alike) are expecting companies to make stronger commitments to sustainable practices that impact both the environments and rights of affected local communities.

As we discuss in this article, a successful approach to community engagement would draw from internationally-recognized standards for corporate sustainability and responsible business practices. This entails, at the outset, a nuanced appreciation of the nexus between environmental and human rights and how the two interplay to impact rightsholders. It also calls for thorough and thoughtful corporate due diligence framed by the U.N. Guiding Principles on Business and Human Rights.

Community Grievances

Meaningful and sustained engagement of affected rightsholders, especially groups that have historically been most vulnerable to adverse industrial impacts, will be critical if technology companies want to secure a social license to operate and ensure that date centers are developed in a community-centric, sustainable manner. Projects that lack such input face considerable legal, social, and reputational risks in both the near and long term. Aspects of this were also discussed in a 2025 article on Foley Hoag’s Energy and Climate Counsel blog.

Specific examples of proposed and newly-constructed facilities are myriad and news coverage of the societal response is a dominant topic in both traditional and social media. Local residents, community activists, and policymakers responding to their constituents have cited many concerns with the current approach to data center development that showcase how environmental and human rights intersect. This includes:

The Politics of Community Resistance

Stories like this have sparked massive pushback from local communities and the activist groups they formed. In California, the city of Monterey Park voted to ban the development of data centers within its city limits, with 86% in favor. Voters explained that they had heard how data centers built in other neighborhoods have brought pollution, rising energy costs, and compromised drinking water. In their view, the decision came down to basic public health concerns and the right to clean air and water.

Monterey Park is just one of many communities where residents have organized against data center development and AI infrastructure. Thus far, hundreds of activist groups across dozens of states have engaged in well-organized efforts to stop or delay data centers from being built near them. Without addressing the concerns of local communities and securing their buy-in, companies pursuing data center development will struggle to secure a critical component in stakeholder trust building: a durable and lasting social license to operate.

Concern about the impact of data centers on health, safety, and rights is bipartisan and geographically diffuse. At the state level, many legislatures that have enacted tax incentives for data centers are starting to consider reversing or significantly reducing them. Governor JB Pritzker of Illinois, for example, said his directive that reversed data center tax breaks came from increases in energy costs and the strain on water resources the centers would generate. He has called on lawmakers to pass new data center reforms during the fall session of the Illinois General Assembly.

Some states have responded by temporarily suspending data center construction all together, showing what consequences lie ahead for tech companies that fail to include communities – in particular groups that have historically faced greater exposure to adverse human rights impacts and the effects of climate change – in consultations at the outset of data center construction or, ideally, when such projects are being seriously considered or planned. In New York, Governor Kathy Hochul recently issued an executive order imposing a one-year moratorium on new data center construction, and is considering whether to sign or veto legislation passed by the New York State Legislature that would impose a two-year pause.

And there is federal legislation in play that would impose a national moratorium on data centers until Congress enacts regulations on artificial intelligence. In the interim, openings to discuss potential economic benefits for local communities are being overshadowed by their outrage.

The political firestorm has also spilled into close election races in several states. In Michigan, Mike Rogers, the Republican candidate for Senate, was compelled to announce recently that he would support a one-year data center moratorium in his state as he battles his Democratic contender, Abdul El-Sayed. El-Sayed’s election platform contains a section dedicated to data center accountability, including calls for binding community benefit sharing agreements. Meanwhile, the Republican Governor of Texas, Greg Abbott – who is up for reelection – said that he has placed several data center projects into abeyance until state regulators can look more closely at their benefits and repercussions.

In April 2026, the U.S. House Committee on Energy and Commerce reviewed seven pieces of proposed legislation related to AI infrastructure, its potential impact on energy transmission, and the strain data centers could put on the nation’s energy grid. The most viable in the passel of measures is the Rate Payer Protection Act, which would seek to protect individuals who live near data centers from spiking energy bills. This week, the House passed the measure under suspension of the rules, an expedited process reserved for legislation that enjoys strong support across parties. Immediately after the vote, House lawmakers headed home to face voters.

By the November elections, lawmakers will have heard more than they would like and will be under immense pressure to pass measures into law when the 120th Congress starts session in January – if not before then.

Meanwhile, at the Executive Branch level, although the White House’s current position on AI is in flux, the Trump Administration has shown interest in a federal standard if it preempts state laws. There are unresolved questions, however, regarding whether the White House will accept safeguards on AI technology that restrict the Executive’s use of it, particularly in the theatre of war, surveillance, and immigration control. 

Even if data center legislation does not become federal law, the flood of proposals is helping to set the parameters for action at the state and municipal level; congressional efforts are elevating the issue to greater prominence nationally, adding momentum to the work of local governments that was first catalyzed by constituent demands. 

Furthermore, data centers and their supply chains segments – most notably the upstream mining of critical minerals needed to manufacture cloud computing components – may have serious implications for the rights of Indigenous Peoples. Tribal nations worry about the potential long-term impacts to sacred lands and their peoples if these technologies are developed in the absence of a formal consultative process and without accounting for relevant Indigenous knowledge.

For centuries, tribal communities in America’s Indian Country have been disproportionally harmed by large-scale infrastructure projects and extractives operations. Burgeoning AI supply chains stand to consume gargantuan amounts of critical minerals buried below undeveloped lands, posing additional risks for Indigenous communities and practices.

The tech industry is also encountering large-scale community resistance to technologies that are in the downstream segment of the AI value chain. As law enforcement agencies increase their use of high tech surveillance in the name of public safety, rightsholders and their elected representatives have grown increasingly weary of the potential for mass violations of privacy rights and restrictions on freedom of movement. Surveillance of the public domain will increasingly rely on the large storage capacity that data centers can provide, emphasizing how the two technologies can dually facilitate harms to communities when they are not aligned with core sustainability principles.

Community Expectations for Sustainable Technology

Until only recently, the term sustainability was mainly about the environmental impacts of corporate activities. Over time, the term has come to encompass both the environmental and human rights impacts of corporate operations, product design, and supply chains. Technology-driven industrial transformation has over time allowed societies to observe first-hand how climate change can undermine the enjoyment of rights. 

In its nascent phase, digital technology was touted as a cleaner industry than conventional economic sectors, with many proponents noting that digital technology was more environmentally friendly based on how much it would reduce paper use and how much smaller its physical and energy footprint appeared to be. Digital technology’s potential as a tool for social good also attracted supporters who argued that it would usher in a new era of democratic change, equal access to knowledge, and strengthen human rights in many other ways.

But this perspective radically changed as technology use scaled up and communities became more dependent on digital tools to do everything from the most basic of daily tasks to securing their place in the modern labor market.

Like other industries, digital technology has proven to be just as prone to environmental and social challenges even if its design, use, and effects are fundamentally different than the industries that came before. And just as other business enterprises in the global economy have had to confront the reality of adverse impacts, AI’s infrastructure and supply chains have been increasingly associated with harms.

AI-enabled products represent an area of technological change in which new types of human rights challenges are quickly emerging and that communities want addressed. Companies’ risk management systems must be designed to carry out due diligence that includes close engagement with communities and their advocates to address emerging problems.

A principal development in internationally-recognized sustainability standards for companies was the establishment of the Global Compact and the U.N. Sustainable Development Goals (SDGs).

The Global Compact is the world's largest corporate social responsibility initiative that is supported by over 25,000 companies and non-business entities. Simply put, the Compact is a clarion call to the private sector to align business plans, operations, supply chains, and products with universal principles establishing companies’ responsibilities to sustainable development. The Compact was designed to energize corporate commitments to the SDGs, and both frameworks serve as holistic complements to sustainable approaches that draw environmental and human rights closer together.

Long-term data center development implicates many of the SDGs, including but not limited to: SDG 3 (health and wellbeing), SDG 6 (clean water), SDG 7 (affordable and clean energy), SDG 8 (decent work and economic growth), SDG 10 (reducing inequality), SDG 11 (sustainable communities), SDG 12 (responsible consumption and production), and SDG 13 (climate action).

The Compact's three environmental principles call for precautionary measures to address environmental challenges, promote greater environmental responsibility, and encourage the development and diffusion of environmentally friendly technologies. Its two human rights principles call for companies to respect the protection of international human rights and to make sure that they are not complicit in human rights abuses.

The latter requires careful preliminary and regular human rights due diligence under the direction of the U.N. Guiding Principles on Business and Human Rights (UNGPs), in order to identify salient harms that may occur in the course of a company’s activities and to adequately mitigate or prevent them. Tech companies can build further trust by reporting on their efforts to implement and learn from the UNGPs process, vis-a-vis the resources provided in the UNGPs Reporting Framework.

Engaging Communities and Stakeholders 

While most attentive to rights-holders in affected communities, engagement strategies should account for the range of stakeholders invested in community wellbeing. There are a number of groups whose viewpoints are essential: 

• Community interest groups, including formally and informally organized groups representing the positions of local communities, neighborhoods, constituents, and vulnerable populations toward data center development
• Civil society, including representatives of human rights organizations, data privacy groups, civil and minority rights groups, faith-based and interfaith coalitions, environmental and human rights defenders, public accountability organizations, and unions that can provide perspectives on data center development and its consequences for society, sustainability, and resource access
• Local, state, and national policymakers, including those in Congress, state legislative assemblies, members of Congress, neighborhood advisory councils, and officials in local and federal government agencies 
• Media, researchers, and think tank experts, including investigative journalists who cover AI and data centers and their impacts on communities; and academic researchers and think tank experts in the field of technology policy
• Law enforcement, including local and federal law enforcement leaders and private security contractors responsible for public safety at large scale development projects
• Shareholders, including shareholder coalitions advocating for sustainable and responsible practices in technology, socially responsible investment firms, and pension administrators
• Indigenous Peoples, including First Nations, Native Americans, and others from traditional societies whose sacred lands and resources may intersect with critical mineral extraction and the installation of AI infrastructure 

Looking Ahead

With respect to policymakers, the November midterm elections will in part be shaped by voters’ anxieties over data centers and the larger AI supply chain. This in turn dovetails with persistent uncertainties related to affordability, resource governance, and the power of constituents in a democracy. Regardless of which parties end up controlling Congress, state legislatures, and city councils, policymakers will have no choice but to tackle data center issues head on.

For the companies leading on this, success hinges on the communities they seek to serve. In an era where the nature of these technologies makes it easier to disconnect from on-the-ground realities, tech companies will court greater risks that could prove unmanageable in the future if they do not – in the immediate term – approach their projects with sustainability and community interests as the priority.

This requires a nuanced understanding of the complex relationship between environmental and human rights and further compels due diligence that can effectively anticipate and mitigate both actual and potential harms. Such due diligence should be premised on the approaches in the UNGPs. In complement, it calls for precedent-setting best practices developed by industry that also incorporate input from local stakeholders. 

Claire Wilson, J.D. Candidate at Boston College Law School and 2026 Summer Associate at Foley Hoag, contributed to this blog post