Raising the Sustainability Benchmark for Data Centres in Malaysia

Raising the Sustainability Benchmark for Data Centres in Malaysia

As Malaysia positions itself as a regional digital-economy and AI hub, sustainability has moved from a secondary consideration to a strategic requirement. Data centres supporting cloud, AI and high-density workloads consume significant energy, cooling capacity and water. Without deliberate design, rapid expansion risks placing long-term strain on national resources and undermining ESG commitments. 

Sustainability Is Now a Strategic Risk for Malaysia’s Data Centre Sector 

Malaysia’s data centre growth has drawn increasing scrutiny, particularly around energy intensity and water consumption in a tropical climate. Policy analysts and industry observers have warned that unchecked expansion could strain electricity and water supply, especially as AI workloads accelerate demand.¹ 

In response, regulators have begun to raise the bar. In early 2025, Malaysia’s water regulator SPAN urged new data centre developments to incorporate alternative water sources and reduce reliance on potable or treated water for cooling.² At the same time, the Ministry of Investment, Trade and Industry (MITI), through MIDA, issued guidelines promoting energy efficiency, water efficiency, low-carbon operations and sustainable site practices for data centres.³ 

For enterprises, particularly those with strong ESG mandates or regulated workloads, sustainability is no longer optional. It is a board-level risk, a compliance requirement and a reputational factor. 

Energy Efficiency by Design

Energy efficiency has become a core concern for Malaysian CIOs. AI and high-density compute place unprecedented strain on power infrastructure and operating budgets, making efficiency a determinant of long-term viability. 

KL1 Kuala Lumpur has been designed with this reality in mind. It has achieved a GBI Platinum Provisional Rating, the highest tier under Malaysia’s Green Building Index.⁴ 

One of the key performance indicators of this design is KL1’s ability to achieve a Power Usage Effectiveness (PUE) of less than 1.4 at 25 percent IT load, placing it among the most efficient data centres operating in hot, humid climates. 

This efficiency is enabled by: 

• A UPS Energy Saver System that reduces electrical losses 

• Optimised power distribution paths to minimise inefficiencies 

• Advanced containment and cooling strategies that reduce overall cooling demand 

• Real-time PUE monitoring at both facility and IT levels, enabling transparent performance tracking 

For enterprises, this means lower operating costs, stronger ESG reporting and reduced exposure to future energy volatility, even as AI workloads scale. 

Cooling and Water Efficiency for Malaysia’s Climate Reality 

Cooling and water usage represent some of the most critical sustainability challenges for data centres in Malaysia’s climate. AI workloads, which generate significantly more heat than traditional compute, intensify these pressures. 

KL1 Kuala Lumpur’s design directly responds to this environment. Advanced containment and airflow optimisation ensure cooling is delivered precisely where required, reducing waste and improving overall efficiency. CO₂ monitoring and intelligent airflow controls further enhance ventilation and occupant wellbeing. 

Water efficiency is equally central to KL1’s sustainability strategy. The facility integrates: 

• Rainwater harvesting, reducing potable water consumption by more than 35%

• On-site greywater treatment, enabling approximately 10 percent of water to be recycled 

• Low-VOC and low-formaldehyde materials, supporting healthier indoor environments and reduced environmental impact 

With its low WUE design, KL1 provides assurance that operations remain reliable and sustainable even under water stress or climate pressure. This directly aligns with emerging regulatory expectations and community concerns around responsible water use. 

Aligning with Malaysia’s Sustainability and Regulatory Frameworks 

Operating at scale in Malaysia increasingly requires demonstrable alignment with national sustainability frameworks. MITI’s data centre guidelines explicitly reference energy efficiency (PUE), water efficiency (WUE) and low-carbon design as baseline expectations.³ 

Malaysia’s Green Building Index (GBI) further reinforces these requirements through a data centre–specific assessment framework that evaluates energy, water, materials, site planning and environmental performance in local climatic conditions.⁴ 

KL1 Kuala Lumpur has been designed in accordance with these frameworks from the outset. In doing so, NEXTDC becomes the only data centre operator to achieve the highest sustainability standard across both Australia and Malaysia, providing customers with confidence that their infrastructure partner meets global and local sustainability benchmarks. 

What Responsible Enterprises Should Demand

When selecting a data centre partner in Malaysia, enterprises should ask: 

• Is the facility aligned with MITI and MIDA sustainability guidelines? 

• Are PUE and WUE optimised, measured and transparent? 

• Is cooling designed for high-density compute in tropical conditions? 

• Does the site meet GBI or equivalent green-building standards? 

• Can the operator support long-term ESG reporting and governance? 

Build Responsibly for Malaysia’s Digital Future 

In the AI era, sustainability underpins long-term trust. Infrastructure that cannot operate efficiently, responsibly and transparently will struggle to scale as regulatory; environmental and stakeholder expectations rise. KL1 represents a new generation of data centre infrastructure in Malaysia, one that balances AI performance, capacity and sustainability without compromise. 

For Malaysian enterprises, choosing KL1 means the ability to: 

• Control operating costs through high-efficiency energy and cooling design 
• Reduce exposure to water and resource scarcity risks 
• Meet ESG, regulatory and compliance obligations with confidence 
• Demonstrate long-term commitment to sustainable digital growth 

Pre-register to: 

• Receive updates on KL1’s sustainability design and development 
• Be among the first to tour the facility once operational
• Explore how KL1 can support AI, cloud and ESG ambitions