Shift published its report Data Centers and Social Impacts: What Matters for Financial Institutions (September 2026), drawing on discussions convened with environmental and social practitioners from its Financial Institutions Practitioners Circle in June 2026.
Human Level’s Take:
- The development of data centers is accelerating at a pace that is quickly outstripping regulation, practitioner capacity and the time available for meaningful due diligence. And as more infrastructure is built, the pressures go beyond environmental. They are increasingly about people too, from access to land, water and energy to livelihoods, working conditions and the effects of AI further downstream.
- Those financing this expansion sit at an important point of leverage. Yet social and human rights issues can still be a blind spot, even where they have implications for project viability. And when banks come in after decisions on siting, design or permitting have already been made, the space to influence those impacts can quickly narrow.
- The social impacts of data centers neither begin nor end at the project site. Look across the value chain and the picture gets much bigger: working conditions and critical minerals upstream; land, resources and communities around construction and operations; and workforce displacement, privacy, discrimination and other impacts linked to how computing capacity is ultimately used downstream.
- The good news? Much of this is familiar territory. Mining, renewable energy and other infrastructure sectors have been navigating questions around land, natural resources, community opposition and stakeholder engagement for years. The tools and lessons are there for the taking, particularly an integrated climate-nature-people lens that recognizes that pressure on water, land or energy rarely stops at the environmental boundary.
- In practice, it comes back to the fundamentals. Apply a value chain approach. Understand who could be affected and where the most severe impacts could arise. Engage communities early enough to shape decisions. Set expectations with clients before the deal is moving at full speed. And use leverage while there is still room to influence outcomes. The data center context may be moving fast, but many of the building blocks for addressing impacts on people are already in hand.
Some key takeaways:
- The data center boom brings human rights risks into sharper focus for financial institutions: Data centers have become one of the defining infrastructure investments of the decade, with Shift citing McKinsey’s estimate that $6.7 trillion will need to be invested between 2025 and 2030 to keep pace with growing demand for compute power. That scale and pace of development are drawing increasing scrutiny from regulators, investors and communities, with concerns ranging from pressure on energy, water and land to the broader effects of digitalization on jobs and inequality. For financial institutions financing this expansion, Shift’s discussions with environmental and social practitioners point to an increasing gap: while due diligence is often dominated by energy demand, water use and greenhouse gas emissions, social and human rights issues can be overlooked even where they may affect project viability. Five challenges emerged: social issues remain a blind spot in data center due diligence; community opposition is becoming a financial risk; many developers and project sponsors have limited familiarity with international E&S standards; due diligence requirements are facing greater scrutiny or resistance in some jurisdictions; and the speed of transactions, combined with the timing and nature of bank involvement, can limit practitioners’ ability to influence decisions before key project choices have been made.
- The social impacts of data centers neither begin nor end at the data center: Shift maps potential impacts from workers and communities upstream, through construction and operations, to workers, consumers and end-users downstream. Upstream, these include labor rights and occupational health and safety risks in the manufacture of chips, servers and other components, as well as forced and child labor risks in critical mineral supply chains such as cobalt, nickel and rare earths. During construction and operations, impacts can arise around land acquisition and displacement, water and energy use, noise and community health and safety, alongside cumulative pressures where multiple projects are concentrated in the same region. The report also highlights potential effects on housing, cost of living and electricity costs. Downstream, the picture broadens further: workforce displacement associated with the digital transition may affect some groups disproportionately, while the ultimate use of computing capacity can create risks for consumers and end-users related to privacy, non-discrimination, freedom of opinion and expression, health and life. This wider view also surfaces practical due diligence questions around project timelines, impacts on vulnerable groups, cumulative pressures on natural resources, contested land rights and whether community concerns are feeding into company decision-making. For financial institutions, this broader value chain provides a basis for more specific due diligence. Using the Business Model Red Flags, Shift points practitioners toward concrete questions about issues including project timelines, impacts on vulnerable groups from resource use, cumulative impacts, contested land rights and whether community concerns are feeding into company decision-making.
- The building blocks for stronger data center due diligence already exist: Financial institutions can draw on approaches already used in mining, renewable energy and other large infrastructure projects, while applying an integrated climate-nature-people lens to understand how pressures on land, water and energy connect to livelihoods, health, access to essential resources and community rights. In practice, that means asking more of community engagement. With Data Center Watch estimating that community opposition contributed to $156 billion in U.S. data center projects being cancelled or delayed in 2025, banks can assess not simply whether consultation occurred, but whether it started before key decisions were made, reached affected and potentially vulnerable groups, responded to concerns and actually influenced project design, siting, mitigation or benefit-sharing. Banks can also set expectations on international environmental and social (E&S) standards early, help less experienced developers understand how those standards apply in practice, and coordinate with co-lenders around common expectations and time-bound actions where gaps emerge. Where E&S due diligence faces political resistance, practitioners can articulate how impacts on people and planet translate into project delays, disruption, legal action, higher financing costs or stranded investment, grounding the case for due diligence in practical and financially material risks. And where transaction timelines are tight, action does not have to wait for the next deal: practitioners can prioritize the most severe impacts within individual transactions, coordinate with other lenders and use leverage before disengaging, while building internal expertise, setting expectations publicly, engaging clients before financing is sought and helping shape industry standards at the portfolio level.
