Water-Conscious Cloud Strategies 2025

CSRD requirements, WUE, and practical insights for IT decision-makers

The growing importance of water consumption in data centers is being significantly reinforced by the entry into force of the Corporate Sustainability Reporting Directive (CSRD) of the European Commission as well as by the increasing requirements for sustainable IT design. The CSRD requires large companies and listed SMEs from 2024/2025 onward to provide comprehensive sustainability reporting, which also includes environmental aspects such as the water consumption of IT infrastructures and cloud services. The Water Usage Effectiveness (WUE) metric is becoming increasingly important, as it makes water consumption per kilowatt hour of IT output transparent and serves as a benchmark for sustainable cloud strategies. IT decision-makers must now reposition themselves – with strategies that combine regulation, technology and responsibility.

Why water is becoming central to the CSRD

Data centers consume enormous amounts of water – for cooling, humidification and indirectly through electricity generation. According to the UN, water scarcity is being exacerbated by climate change; at the same time, lack of transparency obscures actual consumption.

According to data from Computer Weekly, large shares of water are used by cooling and humidification systems, with evaporation in cooling towers being an unavoidable loss of water. The CSRD will therefore in future require precise reporting of this data – not only from a regulatory perspective (double materiality), but also to analyze environmental impacts and risks.

Water consumption and the WUE efficiency metric according to EN 50600-4-9

The EN 50600-4-9 standard defines Water Usage Effectiveness (WUE) as the ratio of water consumed by the data center to the IT energy consumption. Water consumption is calculated from the difference between water taken in and water returned.

WUE is measured in three levels:

1. Direct water use of the data center

2. Expanded assessment: incl. water consumption for energy supply, differentiation by water type (e.g. drinking water) and regional water stress

3. Additional factors: water consumption caused by data center logistics

Despite growing water scarcity, studies show that only around 50% of organizations record corresponding consumption data. Systematic collection of WUE can help make water consumption more transparent and identify savings potential.

(Source: Federal Environment Agency)

How much water data centers consume

• Microsoft consumed around 6.4 billion liters of water in 2022 – an increase of 34% compared with 2021. According to Microsoft, the company’s data centers worldwide consume 0.49 liters of water per kWh.

• Google reported around 16.3 billion liters for 2021, with an average of 1.7 million liters per day and site.

• AWS’s WUE (Water Usage Effectiveness) is 0.19 l/kWh, far below the industry average of 1.8 l/kWh.

(Source: Computer Weekly)

Such data make it clear: transparency is possible – and necessary, to firmly establish WUE as a benchmark in ESG reporting.

WUE & climate-conscious cooling technologies

Water Usage Effectiveness (WUE) measures liters of water per kilowatt hour of IT performance. Low values signal resource efficiency. IT providers today use:

1. Reuse of process water/rainwater in data centers enables sustainable cooling by using non-potable water to supply cooling systems. This reduces freshwater consumption, lowers operating costs and conserves valuable resources – especially in regions with water scarcity.
   
   
   

2. Free cooling uses outside air to cool data centers – without energy-intensive refrigeration units. Cold air is fed directly into the data center, where it absorbs heat from the servers and is then exhausted again. The method is particularly efficient because it requires only minimal equipment and consumes very little electricity – apart from running the fans. Suitable outside temperatures, moderate humidity and clean air are prerequisites for its use. The servers must also tolerate higher inlet temperatures (up to approx. 27°C), which modern hardware increasingly allows. Free cooling is therefore a climate-friendly option, but it often needs to be combined with additional cooling technologies.
   (Source: Datacenter Insider)
   
   
   

3. Adiabatic cooling uses the natural effect of evaporation: when water evaporates, it removes heat from the surrounding air. In cooling systems such as CoolStream, dry outside air is passed through a moistened support material. Water evaporates in the process, cooling the air by up to 15°C (in Europe) – without the use of energy-intensive refrigerants or compressors. The hotter and drier the outside air, the higher the cooling performance. This method is particularly energy-efficient, environmentally friendly and reliable, even in extreme heat.
   (Source: Colt )
   
   
   

4. Liquid Cooled Server (LCS) from Thomas-Krenn are water-cooled rack servers with innovative direct hot-water cooling, developed in collaboration with Cloud&Heat. They significantly reduce energy consumption, enable lower chip temperatures and higher power density. The cooling system removes heat directly from the CPU and RAM; the heated water (up to 60°C) can be reused for waste heat applications, e.g. for heating. LCS reduce fan energy and power costs, minimize noise and dirt. The technology is particularly suitable for compute-intensive applications such as AI and cloud computing. Existing servers can be retrofitted, and with experienced partners, integration into data centers is safe and sustainable.
   (Source: Thomas-Krenn)

Regional water scarcity & site selection

The United Nations is sounding the alarm in a recent report by the World Meteorological Organization (WMO): by 2050, more than five billion people could lack sufficient access to drinking water. Today already, around two billion people live in countries without secure water supplies. The main causes are climate change, population growth and dwindling water resources.

According to the report, since the turn of the millennium flood disasters have increased by 134 percent and droughts by 29 percent. At the same time, global water reserves have declined significantly. The UN criticizes a lack of preparedness: early warning systems, water management and information exchange are often uncoordinated and underfunded.

WMO Secretary-General Petteri Taalas is urgently calling for international action. The report stresses the need for effective climate services, better data availability and sustainable water policy to avert the looming crisis.

(Source: Süddeutsche Zeitung)

This means: site selection and technical measures (e.g. free cooling in cooler zones, water recovery) must be targeted in order to both reduce water consumption and manage regulatory risks under the CSRD.

AI and cloud are driving data center water consumption up

The global AI and cloud boom is causing data center water consumption to rise dramatically. Microsoft and Google alone consumed nearly 30 billion liters of water in 2022 combined – an increase of more than 25% compared with the previous year. The main driver is the energy- and cooling-intensive use of AI systems, which are usually cooled with high-grade drinking water.

One example: training GPT-4 in July 2022 consumed around 45 million liters of water in Des Moines (USA) – about six percent of local water consumption. In light of figures like these, political pressure is growing to tie the expansion of new data centers to stricter water requirements.

Although companies such as Microsoft are increasingly relying on efficiency measures, alternative cooling technologies and offset projects, water consumption remains high. A US study estimates that a single ChatGPT use requires up to half a liter of water on average. The sustainability debate around AI is therefore taking on a new, urgent dimension.

(Source: connect professional)

Technology updates & sustainable infrastructure

Many existing data center facilities in Germany are technically outdated. Necessary upgrades consist of:

• Modern cooling systems (liquid/immersion instead of purely air cooling),

• Closed loops to minimize evaporation,

• Site planning along cold water sources (e.g. near rivers in Northern Europe) or connected to district heating networks.

Free cooling combined with liquid-based technology can achieve significant efficiency gains and improve WUE.

Practical example Yorizon: leveraging water and heat potential

Yorizon is a joint venture that combines technological innovation (especially hot-water cooling) with regional infrastructure. The goal is to build a network of sustainable, locally integrated YEXIO data centers in Europe. The Yorizon project implements a hot-water cooling strategy from Thomas-Krenn.AG:

Yorizon relies on hot-water cooling developed by Thomas-Krenn.AG, based on closed cooling circuits. This technology uses water as a cooling medium, which is particularly efficient because of its excellent heat-transfer properties (up to 3,800 times better than air).

The waste heat generated during the cooling process is used in a targeted way. Up to 80–85 percent of the waste heat generated can be fed into municipal district heating networks as district heat or otherwise utilized.

The closed cooling circuit minimizes drinking water consumption. The system is designed so that little or no additional drinking water is needed for cooling.

A joint venture that combines technological innovation with regional infrastructure – and thus offers a best-practice model for CSRD-compliant, water-optimized cloud services.

IT governance as a lever for water transparency and compliance

IT decision-makers should:

1. Establish WUE as a KPI in cloud reporting, ideally automated via sensors and AI-supported systems.

2. Promote water reuse systematically – e.g. recovery of rainwater.

3. Evaluate new cooling systems – liquid and immersion cooling, free-cooled sites, if necessary use of seawater or groundwater.

4. Develop a site strategy based on water stress: distribute data centers across water-scarce and water-rich regions.

5. Data center as an instantaneous water heater, feeding the water back into the district heating network without high water consumption.

(Source: Computer Weekly)

Competitive advantage & regulatory benefits

• CSRD compliance through precise water metrics,

• Cost savings through more efficient cooling,

• Risk minimization in times of water scarcity,

• Attractiveness for ESG investors (water as a growing part of sustainability due diligence).

Conclusion

Water consumption will be just as critical for CSRD reporting in 2025 as CO₂ emissions. Water Usage Effectiveness (WUE) is the central control instrument – with a major impact on data center technology, site selection and ESG transparency.

Innovative approaches such as liquid cooling, free cooling, immersion, embedded in holistic infrastructure concepts such as those at Yorizon, show how water responsibility, compliance and economic efficiency can be successfully combined.

Key measures at a glance