Social License: Data centers: Not just megawatts, but mandate

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Social License: Data centers: Not just megawatts, but mandate

J P M O R G A N Asia Pacific Equity Research

26 June 2026

Social License

Data centers: Not just megawatts, but mandate

Data center buildout is shifting from an engineering-and-real-estate problem to a

political-economy problem: who gets power, who pays for upgrades, and who

tolerates the local impacts. This note highlights the rising “social license” risks

associated with data center build and argues that the market is underpricing the data

center backlash that is making approval risk non-linear. In this environment,

Behind-The-Meter plays look attractive not just on fundamentals, but because they APAC Equity Thematic and

can reduce strain on local grids, adding value in terms of the social acceptance they Sustainable Investing Research

may help projects gain. See our Transition Talks note (here) for a detailed rundown Hannah L Lee AC

of top picks. (852) 2800-8886

hannah.l.lee@jpmorgan.com

• The data center backlash is real - and becoming financially material. J.P.MorganMorganBrokingSecurities(Hong (AsiaKong)Pacific)LimitedLimited/ J.P.

Attitudes toward data centers have hardened in the US, with recent polling

suggesting that over 70% of Americans would oppose a data center near their

home (Source: Heatmap). Pushback is emerging in Asia, as well, with protests

in Johor and lawsuits in Tokyo (link, link). The key point is that social license

is now a timeline and cost variable, not just a reputational footnote.

• Environmental issues are key concerns, but so are power prices.

Community concerns around data centers have proved farther-reaching than

we had expected, spanning quality-of-life issues to environmental concerns,

but, ultimately, resource use and the potential impact of large loads on end user