Key Takeaways:

• AI's energy surge is pushing data center power demand up over 160% by 2030, with fossil fuel reliance potentially adding ∼220 million tonnes of CO2 globally.
• Data center operators are turning to green bonds to fund cleaner AI infrastructure.
• The data center green financing market has grown to $61.3B across 113 deals since 2020, with $25.4B issued in 2025 alone, roughly 40% of the total.

Can AI Go Green? Why Data Centers Are the Next Frontier for Green Bond Issuance

Artificial intelligence is driving an unprecedented surge in energy demand. Goldman Sachs Research projects that data center power demand could grow more than 160% by 2030 compared to 2023 levels, and in a scenario where 60% of that increased demand is met by fossil fuels, global carbon emissions could rise by roughly 215 to 220 million tonnes.¹ The green bond market is one of the financing mechanisms the industry is turning to. Since 2020, 113 data center green bonds and loans have been issued globally, totaling roughly $61.3 billion. This piece explains how data center green bonds work, how fast the market is growing, and what it means for investors.

How Much Energy Do AI Data Centers Use?

AI workloads demand significantly more power than traditional computing. Training a large language model or running inference at scale requires far more electricity per unit of output than a standard server query. Increased power needs from data centers could lead to higher usage of fossil fuels to fulfill the energy deficit. Goldman Sachs estimates that roughly 60% of new data center capacity could rely on fossil fuels if green alternatives are not built fast enough. This would add an estimated 220 million tonnes of CO2 globally, roughly equivalent to the annual emissions of a mid-sized country.

Data center operators are increasingly turning to green bond issuance to address this problem. Proceeds are typically earmarked for using renewable energy to power the data centers, energy-efficient cooling systems, and low-carbon construction. These investments can meaningfully reduce the emissions footprint of AI infrastructure. Issuers must also report on how proceeds were deployed and what environmental outcomes were achieved, creating a layer of accountability that distinguishes green bonds from conventional financing.

What Is a Data Center Green Bond?

A green bond earmarks proceeds specifically for projects with measurable environmental benefits. In the context of data centers, eligible investments typically include renewable energy sourcing, energy efficiency upgrades, cooling system improvements, and low-carbon construction. The VanEck Green Bond ETF (GRNB) holdings such as Vantage Data Centers and CyrusOne have used green financing for exactly these purposes. For example, Vantage Data Centers has used green financing to fund facilities powered almost entirely by hydroelectric energy, with air-cooled cooling systems that require virtually no water.

Issuers operate under recognized frameworks, most commonly those established by the International Capital Market Association (ICMA) or the Climate Bonds Initiative (CBI), and are obligated to disclose how proceeds were deployed. Annual impact reporting is also a standard practice, which gives investors visibility into the environmental outcomes of the projects financed by the green bond.

How Fast Is the Data Center Green Financing Market Growing?

The data center green financing market has grown substantially since 2020, with 113 Climate Bonds Initiative (CBI)-aligned bonds and loans issued totaling roughly $61.3 billion. Data center green financing was a niche corner of the market through 2023, with deal counts running in the single digits annually. However, in recent years AI infrastructure investment drove growth in total (conventional and green) data center debt issuance to $182 billion in 2025, nearly double the prior year.² Green financing grew alongside it, reaching $25.4 billion in 2025 alone. That single year represents roughly 40% of all CBI-aligned green volume since 2020.³ Another 20 green financing deals have already been issued year to date in 2026.

Total Green Bonds and Loans Issuance Globally

Source: Climate Bonds Initiative data as of 6/30/2026

Which Companies Are Issuing Data Center Green Bonds and Loans?

Issuance has been driven by a relatively small group of large operators. Vantage Data Centers, Stack Infrastructure, Equinix, CyrusOne, Switch, QTS, and Compass Datacenters account for the bulk of volume, reflecting the capital intensity of building and operating data center infrastructure at scale. Most volume, however, has been raised through loans, private placements or non-USD bonds rather than public USD-denominated structures. For example, Stack Infrastructure's $3.3 billion deal is a loan while Equinix has issued primarily in euros and Singapore dollars.

Data center exposure within the GRNB ETF is therefore concentrated in the USD ABS market, where Compass Datacenters, CyrusOne, and Vantage have issued index-eligible structures. The index currently holds eight data center positions representing roughly 1.2% of the index, with the fund holding five of those positions. If more operators access the U.S. public bond market, that exposure could grow.

Table: Select Data Center Green Financing Issuers

Source: Climate Bonds Initiative data as of 6/30/2026

Where Are Data Center Green Bonds and Loans Being Issued?

The data center green financing market is predominantly a U.S. story. Ninety-five of the 113 financing instruments worth roughly $50.1 billion, are issued by U.S. issuers, representing about 82% of total dollar volume. Much of the U.S. issuance has been raised through loans and private ABS structures, which fall outside the S&P Green Bond U.S. Dollar Select Index that GRNB tracks.

Outside of the U.S., Singapore is the only other market of meaningful scale, with approximately $7.1 billion across eight bonds. The Netherlands, UK, Germany, Brazil, Malaysia, and Thailand account for the remainder of the issuance each under $2 billion.

Currency diversification is somewhat broader than the geographic footprint suggests. While dollar-denominated deals dominate, a number of issuers have accessed local or offshore markets, Equinix in euros and yen, AirTrunk in Australian dollars, reflecting the global nature of the underlying infrastructure even where issuance remains concentrated.

Total Green Issuance by Country ($M) 2020 – 2026

Source: Climate Bonds Initiative data as of 6/30/2026

Do Data Center Green Financing Meet Rigorous Environmental Standards?

Our research based on the Climate Bonds Initiative (CBI) green bond issuance data shows, 113 data center related green bonds and loans were issued since 2020. These bonds and loans align with the standards set by Climate Bonds Initiative, a meaningful distinction as it signals that the financing instrument is aligned with a recognized, third-party standard rather than relying solely on the issuer's own framework.

Most green bond issuances also include a “second party opinion” from an independent reviewer, providing an additional layer of scrutiny. The International Capital Market Association (ICMA) and CBI frameworks remain the most widely recognized standards in the market. Investors should look for robust reporting on how proceeds were actually allocated, and ongoing impact reporting, not just the presence of a framework at issuance.

How Does GRNB Fit Into the Data Center Green Bond Market?

Data center-related green bond issuance has been dominated by U.S. issuers raising capital in U.S. dollars. GRNB tracks the S&P Green Bond U.S. Dollar Select Index, which includes only U.S. dollar-denominated bonds designated as green by the Climate Bonds Initiative, positioning it to provide exposure to the growing data center segment of the market.

The financing of AI infrastructure is one of the more consequential intersections of technology and sustainability playing out in capital markets today. The data center green financing market has grown from a handful of deals a year to nearly 50 in 2025 alone, driven by the scale of AI infrastructure investment and the industry's need to access capital for cleaner alternatives. For investors looking for exposure to that growth through a standards-based vehicle, GRNB offers access to the USD-denominated green bond market where data center issuance is likely to grow.

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