RESOLVED: Shareholders request that the Board of Directors annually disclose region-level metrics on Digital Realty’s exposure to water-related risks and operational water intensity in water-stressed areas, at reasonable expense and excluding proprietary information, to enable investors to assess where the company’s portfolio is most vulnerable to or exposed to water scarcity risks.
WHEREAS: Water is a material operational and strategic risk for Digital Realty (“DLR”), affecting business continuity, growth strategy, and long-term value creation. Approximately 32% of DLR’s water consumption is sourced from regions experiencing high or extremely high-water stress, yet current reporting aggregates water risk, limiting investor insight into operations in water-stressed areas where risks are most material. DLR reports improvements in U.S. water usage effectiveness (WUE) and a global water use intensity (WUI) metric, but both offer limited visibility into local water risks. Water risk is site-specific, and efficiency gains in water-abundant regions do not offset vulnerabilities in drought-affected areas. Enhanced regional disclosure would give investors clearer insight into water risk exposure across DLR’s highest water-stressed regions.
Although DLR emphasizes only 25% of DLR’s operations use water-based cooling, this does not capture the water demands of future AI growth or its acquisition strategy. As of Q3 2025, AI accounted for 50% of bookings, and management expects “larger contiguous capacity blocks” to come online in 2026–2027, increasing energy and water demand. In acquisitions, DLR typically maintains existing cooling systems, which rely on water-based cooling. Without region-level disclosure, investors cannot fully assess operational vulnerabilities from AI growth and acquisitions in water-stressed regions.
Facilities in water-stressed regions face operational and regulatory risks, including potential loss of social license to operate. According to Data Center Water, “In Q2 2025 alone, an estimated $98 billion in projects were blocked or delayed…” due to community and stakeholder pushback. Regulatory scrutiny is also rising. DLR is among operators being investigated by senators over how their energy use contributes to rising electricity costs for communities. In the EU, where approximately 36% of DLR’s data centers are located, regulators are proposing a water-use cap on data centers to safeguard against shortages.[1]
Peers provide more detailed water risk disclosure. Equinix issues annual Customer Water Reports detailing site-level WUE and total water withdrawal attributable to each customer.[2], [3] CyrusOne reports annually the percentage of facilities in water-stressed regions that are net positive for water, offering investors measurable insight into risk management where scarcity is greatest.
Annual, regional level disclosure in water-stressed areas would provide investors clear insight into DLR’s operational exposure and management of water-related risks where water scarcity is greatest. This transparency would enable investors to evaluate business resilience, anticipate potential operational or regulatory impacts, and assess long-term value creation.
[1] https://go2.digitalrealty.com/rs/087-YZJ-646/images/Report_Digital_Realty_2024_Impact_Report.pdf
[2] https://blog.equinix.com/blog/2024/09/19/how-data-centers-use-water-and-how-were-working-to-use-water-responsibly/#:~:text=As%20previously%20mentioned%2C%20balancing%20this,methods%20where%20local%20conditions%20allow:
[3] https://www.equinix.com/content/dam/eqxcorp/en_us/documents/resources/infopapers/ip_customer_water_reports_en.pdf