Mike Grella on the Critical Importance of Sustainability in Site Selection for Communities and Corporations

I’ve seen many changes to site selection criteria – and many constants – since I began my career as an economic development advisor and attorney in 1995.

What hasn’t changed includes labor availability, infrastructure issues, proximity to customers, market risk, tax and regulatory considerations and quality of life concerns. Over the past several years, location strategies have evolved where companies, developers and corporate site selectors are including diversity, equity and inclusion (DEI), sustainability, quality of place, resilience and shortened supply chains to their short-list of criteria.

While practitioners can make a case that each of these additional factors deserves top billing, in the world where I spend most of my time — data centers and digital infrastructure — sustainability is emphasized not only through the life cycle of a project but is embedded in organization’s DNA given the considerable power requirements. In fact, there are multiple external factors driving sustainability as a top corporate priority, particularly for data center operators and large power users. 

First, the role of environmental social governance (ESG) is becoming more important. ESG refers to the consideration of environmental, social and governance factors in investment and business decisions. As such, corporations are increasingly being held accountable for their impact on the environment and society. To that end, many corporations have made firm commitments to reduce carbon emissions and or achieve carbon neutrality.

Second, Reputation and Brand Image: Sustainability has become an increasingly important factor in consumer purchasing decisions and companies that are seen as environmentally and socially responsible often have a competitive advantage over those that are not, particularly with younger consumers who tend to be more environmentally conscious.

Third, Risk Mitigation: Climate change and other environmental challenges can pose major risks to businesses. Data center site selection risk mitigation considers the potential of natural disasters. By taking steps to reduce their environmental impact and build resilience, companies can help mitigate these risks and protect their bottom line.

Fourth, Cost Savings: Sustainability initiatives can often result in cost savings over the long term, particularly in areas such as energy efficiency, waste reduction and reduced energy costs utilizing innovative technologies such as battery storage, free cooling and power management software.

Fifth, Regulatory Reporting and Compliance: In 2022, the U.S. Securities & Exchange Commission (SEC) issued a proposed rule that would enhance and standardize climate disclosure requirements provided by publicly traded companies. The new regulation would require additional climate disclosures in registration statements and annual reports, such as scenario analysis and stress testing. Final rules have not been released; however, companies need to prepare for greater regulatory and investor scrutiny of the risks and financial impacts of climate change.

Lastly, Employee Retention and Recruitment: Employees are increasingly looking for companies that prioritize sustainability and social responsibility. By demonstrating a commitment to sustainability, companies can attract and retain top talent, particularly among younger workers who are particularly concerned about environmental and social issues.

To meet aggressive sustainability and carbon reduction goals, companies not only need to continuously innovate and engineer more efficient buildings, hardware/server, heating and cooling solutions; they must site operations in areas where they can grow and scale while minimizing their carbon footprint.  

Several Florida cities have made public commitments to reduce their carbon emissions. Gainesville has set a goal to achieve 100% renewable energy and Sarasota has set a goal to achieve carbon neutrality by 2045. Orlando, Palm Beach and St. Petersburg have set goals to become carbon neutral by 2050.

Volusia County is pioneering in its approach to sustainability. The Green Volusia program is a long-term initiative designed to provide residents and visitors with information about sustainable practices. The Green Volusia program coordinates Volusia County’s 2014 Sustainability Action Plan, which identifies seven specific sustainability goals, including providing a healthy economy, maintaining a healthy environment, promoting a healthy community, encouraging efficient transportation and community design, conserving water and promoting water efficiency, conserving energy and promoting renewable energy and reducing waste and promoting recycling.

As the focus on ESG continues to grow and corporations are held more accountable for their impact on the environment and society, Volusia County is well-positioned to lure new investment. It should not take its foot off the gas pedal (of its electric vehicle) in adopting new measures and goals to reduce its carbon footprint.