Digital Realty Trust Inc. | Interfaith Center on Corporate Responsibility

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<strong>Company:</strong>
<p>Digital Realty Trust Inc.</p>
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<strong>Year:</strong>
<p>2026 </p>
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<strong>Issue Area:</strong>
<p>Water </p>
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<strong>Focus Area:</strong>
<p>AI / Artificial Intelligence, Data Centers, Water Impacts </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>RESOLVED</strong>: Shareholders request that the Board of Directors annually disclose region-level<br>metrics on Digital Realty’s exposure to water-related risks and operational water intensity in<br>water-stressed areas, at reasonable expense and excluding proprietary information, to enable<br>investors to assess where the company’s portfolio is most vulnerable to or exposed to water<br>scarcity risks.</p>
<p><strong>WHEREAS</strong>: Water is a material operational and strategic risk for Digital Realty (“DLR”),<br>affecting business continuity, growth strategy, and long-term value creation. Approximately<br>32% of DLR’s water consumption is sourced from regions experiencing high or extremely<br>high-water stress, yet current reporting aggregates water risk, limiting investor insight into<br>operations in water-stressed areas where risks are most material. DLR reports improvements<br>in U.S. water usage effectiveness (WUE) and a global water use intensity (WUI) metric, but<br>both offer limited visibility into local water risks. Water risk is site-specific, and efficiency gains<br>in water-abundant regions do not offset vulnerabilities in drought-affected areas. Enhanced<br>regional disclosure would give investors clearer insight into water risk exposure across DLR’s<br>highest water-stressed regions.<br><br>Although DLR emphasizes only 25% of DLR’s operations use water-based cooling, this does<br>not capture the water demands of future AI growth or its acquisition strategy. As of Q3 2025,<br>AI accounted for 50% of bookings, and management expects “larger contiguous capacity<br>blocks” to come online in 2026–2027, increasing energy and water demand. In acquisitions,<br>DLR typically maintains existing cooling systems, which rely on water-based cooling. Without<br>region-level disclosure, investors cannot fully assess operational vulnerabilities from AI<br>growth and acquisitions in water-stressed regions.<br><br>Facilities in water-stressed regions face operational and regulatory risks, including potential<br>loss of social license to operate. According to Data Center Water, “In Q2 2025 alone, an<br>estimated $98 billion in projects were blocked or delayed…” due to community and<br>stakeholder pushback. Regulatory scrutiny is also rising. DLR is among operators being<br>investigated by senators over how their energy use contributes to rising electricity costs for<br>communities. In the EU, where approximately 36% of DLR’s data centers are located,<br>regulators are proposing a water-use cap on data centers to safeguard against shortages.1</p>
<p>Peers provide more detailed water risk disclosure. Equinix issues annual Customer Water<br>Reports detailing site-level WUE and total water withdrawal attributable to each customer.2, 3<br>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<br>is greatest.<br><br>Annual, regional level disclosure in water-stressed areas would provide investors clear insight<br>into DLR’s operational exposure and management of water-related risks where water scarcity<br>is greatest. This transparency would enable investors to evaluate business resilience,<br>anticipate potential operational or regulatory impacts, and assess long-term value creation.</p>
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<p>1 https://go2.digitalrealty.com/rs/087-YZJ-646/images/Report_Digital_Realty_2024_Impact_Report.pdf<br>2 https://blog.equinix.com/blog/2024/09/19/how-data-centers-use-water-and-how-were-working-touse-<br>waterresponsibly/#:~:<br>text=As%20previously%20mentioned%2C%20balancing%20this,methods%20where%<br>20local%20conditions%20allow:<br>3<br>https://www.equinix.com/content/dam/eqxcorp/en_us/documents/resources/infopapers/ip_customer<br>_water_reports_en.pdf</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Madison Krieger</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>NorthStar Asset Management</span></div>
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<strong>Company:</strong>
<p>Digital Realty Trust Inc.</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Climate Change </p>
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<strong>Focus Area:</strong>
<p>AI / Artificial Intelligence, Water Impacts </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p>RESOLVED: Shareholders request that Digital Realty Trust annually report, at reasonable cost, quantitative water use reduction targets by data center location and report on practices implemented to secure social license to operate and reduce climate-related water risk. The report should be prepared at reasonable expense and omit proprietary information.</p>
<p class=”p1″>WHEREAS: Consumption of freshwater is surpassing the rate at which it can be naturally replenished, creating water shortage risks for companies, communities, and ecosystems.1 As the demand for machine learning applications grows, the need for data centers to handle larger workloads will continue to rise, putting additional pressure on local water resources. By 2025, two-thirds of the global population is expected to be grappling with “absolute” water stress, potentially affecting community access to water and sanitation.2 3</p>
<p class=”p4″>Digital Realty Trust (the Company) operates over three hundred data centers globally including in water- strained regions. While the Company has set energy efficiency and carbon emissions reduction targets, current reporting lacks water use reduction goals for its data center operations.</p>
<p class=”p5″>While Digital Realty Trust states it is “designing and constructing sustainable data centers that use less water and energy to operate,” investors do not have access to a clear timeline or plan toward mitigating and managing water-related risks. These risks include regulatory, input costs, price volatility, stranded assets, reputational, and loss of social license to operate risks.4 5 Some data center developments are facing community and stakeholder opposition due to concerns relating to the potential negative impacts on the environment, land use, rising electricity costs, and lack of employment opportunities.6</p>
<p class=”p5″>Nearly half of Digital Realty Trust properties’ water withdrawals are in areas with High or Extremely High baseline water stress7. However, this aggregated information does not provide investors with the information needed to assess data center water risk.</p>
<p class=”p7″>Digital Realty Trust customers Alphabet and Microsoft have already developed water planning and conservation measures for their data centers, including plans to replenish water locally and in consultation with stakeholders.8 9 10 For investors to feel confident in the Company’s water risk management, the Company can demonstrate the efficacy of its practices by publicly reporting water expectations. 11 12</p>
<p class=”p2″>SUPPORTING STATEMENT: Proponents recommend the Company consider the following points in assessing its approach to setting water usage reduction targets for each data center, prioritizing those located in water stressed regions:</p>

Disclosing the percentage of water withdrawn and consumed, including water usage effectiveness.
Disclosing water quality and quantity risks.
Discussing how the Company’s climate-related goals may impact water-focused goals.
Mapping and engaging stakeholders to communicate and consult on proposed water use reduction and management plans.

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<p class=”p1″>1 https://www.nature.com/articles/s41893-020-0483-z</p>
<p class=”p2″>2 https://www.unep.org/news-and-stories/story/shortages-mount-countries-hunt-novel-sources-water</p>
<p class=”p3″>3 https://utulsa.edu/news/data-centers-draining-resources-in-water-stressed-communities/</p>
<p class=”p2″>4 https://www.ceres.org/resources/reports/global-assessment-private-sector-impacts-water</p>
<p class=”p3″>5 https://www.business-humanrights.org/en/latest-news/chile-tech-giants-build-dozens-of-data-centers-in-chile-while- activist-raise-environmental-concerns/</p>
<p class=”p4″>6  https://www.washingtonpost.com/technology/2024/10/05/data-center-protest-community-resistance/</p>
<p class=”p5″>7 https://s29.q4cdn.com/106493612/files/doc_financials/2023/ar/digital-realty-2023-10k.pdf</p>
<p class=”p2″>8 https://static.googleusercontent.com/media/www.google.com/en//about/datacenters/static/pdf/english-google-tw- impact-report-ext-final.pdf</p>
<p class=”p4″>9 https://azure.microsoft.com/en-us/blog/how-microsoft-measures-datacenter-water-and-energy-use-to-improve-azure- cloud-sustainability/</p>
<p class=”p4″>10 https://blogs.microsoft.com/blog/2024/06/02/microsofts-datacenter-community-pledge-to-build-and-operate-digital- infrastructure-that-addresses-societal-challenges-and-creates-benefits-for-communities/</p>
<p class=”p1″>11 https://energy.ec.europa.eu/news/commission-adopts-eu-wide-scheme-rating-sustainability-data-centres-2024-03-15_en#:~:text=The%20delegated%20act%20sets%20out,Sector%2C%20published%20in%20October%202022.</p>
<p class=”p2″>12 https://www.ceres.org/resources/reports/global-assessment-private-sector-impacts-water<br> </p>

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<div class=”views-field views-field-nothing”><span class=”field-content”> Marcela Pinilla</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Zevin Asset Management</span></div>
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Resolution Details

Company:

Digital Realty Trust Inc.

Year:

2023

Issue Area:

Inclusiveness

Focus Area:

Mandatory Arbitration

Status:

Filed

Resolution Text

RESOLVED:

Shareholders of Digital Realty Trust, Inc. (“Digital Realty”) ask that the Board of Directors prepare a public report assessing the potential risks to the company associated with its use of concealment clauses in the context of harassment, discrimination and other unlawful acts. The report should be prepared at reasonable cost and omit proprietary and personal information.

SUPPORTING STATEMENT:

Concealment clauses are defined as any employment or post-employment agreement that Digital Realty asks employees or contractors to sign to limit their ability to discuss unlawful acts in the workplace, including harassment and discrimination. These can include non-voluntary arbitration agreements (including those with short opt-out periods early in employment), settlement agreements, and non-disclosure or non-disparagement agreements.

WHEREAS:

In June 2022, 45.59% percent of Digital Realty’s investors supported the request of this resolution. Since this high vote, the company has not released any additional information on its use of concealment clauses, nor has it agreed to a conversation with the resolution’s proponents.

It is appropriate to use concealment clauses in employment agreements to protect confidential corporate information. However, Digital Realty’s employment-related agreements may also prohibit workers from speaking publicly about harassment, discrimination, or other unlawful acts. Harassment and discrimination claims should not be kept confidential. If they are, investors cannot be confident in their knowledge of Digital Realty’s workplace culture.

Concealment clauses may limit employees’ remedies for wrongdoing, reduce employee willingness to report discrimination, and prevent employees from learning about shared concerns. Concealment clause use may also create brand, legal, and human capital risks. Arbitration prevents class-action suits, which may allow a sense of impunity from companies with poorly implemented human capital management practices.

A healthy workplace culture is linked to strong returns. McKinsey found that companies in the top quartile for workplace culture post a return to shareholders 60 percent higher than median companies and 200 percent higher than organizations in the bottom quartile.

Digital Realty operates under a quickly changing patchwork of state and federal laws related to the use of concealment clauses and may benefit from a consistent practice across all employees and contractors. As of November 21, 2022, “The Speak Out Act,” which limits non-disclosure agreements when sexual harassment is claimed, is expected to soon be signed into federal law by the President. It joins existing federal legislation which ended the use of forced arbitration in workplace sexual assault and harassment cases. Additionally, a number of states, including California, Maine, New York, and Washington, have reduced employers’ abilities to use of concealment clauses.

Investors seek assurance that missteps are not occurring at Digital Realty, hidden from view because of concealment clauses. Companies such as Alphabet, Apple, Microsoft, and Salesforce, among others, have moved away from the use of these clauses.

1. https://www.hnlr.org/2020/08/forced-into-employment-arbitration-sexual-harassment-victims-are-saying-metoo-and-beginning-to-fight-back-but-they-need-congressional-help/

2. https://www.mckinsey.com/business-functions/organization/our-insights/the-organization-blog/culture-4-keys-to-why-it-matters

3. https://www.forbes.com/sites/kimelsesser/2022/11/16/congress-passes-law-restoring-victims-voices-banning-ndas-in-sexual-harassment-cases/

4. https://www.washingtonpost.com/politics/2022/03/03/biden-signs-new-law-ending-forced-arbitration-sex-assault-harassment/

5. https://www.sec.gov/Archives/edgar/data/1652044/000130817922000262/lgoog2022_def14a.htm

6. https://www.sec.gov/Archives/edgar/data/320193/000119312522003583/d222670ddef14a.htm

7. https://www.reuters.com/legal/litigation/microsoft-says-it-will-not-enforce-non-compete-clauses-us-employee-agreements-2022-06-08/

8. https://finance.yahoo.com/news/salesforce-let-workers-break-ndas-164604675.html

Resolution Details

Company:

Digital Realty Trust Inc.

Year:

2023

Issue Area:

Human Rights & Worker Rights

Focus Area:

Racial Justice

Status:

Vote

Vote Percentage:

12.80%

Resolution Text

WHEREAS:

According to the “Diversity, Equity, and Inclusion (DEI)” website for Digital Realty Trust (the “Company”), the Company aims to “build a place where everyone feels included and sees opportunities to build their careers, regardless of who they are” and that in 2020 the company launched a DEI council to create a more inclusive company;

However, the Company’s diversity data paint a concerning picture. According to the Company’s 2021 EEO-1 report, 93% of executive level officials are white and 86% of those officials are specifically white men. Zero are Black or Hispanic. Of the next four tiers of employees – managers, professionals, technicians, and sales staff – white men make up 60-70% of three of the four categories;

This ignites questions about whether the lack of leadership diversity indicates a systemic challenge at the company;

Author Ibram X. Kendi explains: “every policy in every institution in every community in every nation is producing or sustaining either racial inequity or equity…” existing both in “written and unwritten laws, rules, procedures, processes, regulations, and guidelines that govern people”[1];

Harvard Business Review explains: “[c]ompanies must confront racism at a systemic level – addressing everything from the structural and social mechanics of their own organizations to the role they play in the economy at large”[2];

Corporate culture can include “values, norms, conventions, shared beliefs, customs, traditions, symbols, rituals, knowledge, ideology, identities, and shared mental models.”[3] We believe that long-term value creation could be advanced through analysis of whether and how systemic racism is embedded in company written and unwritten policies, corporate culture, and norms.

RESOLVED: Shareholders request the Board of Directors prepare a report to shareholders analyzing whether written policies or unwritten norms at Digital Realty Trust reinforce racism in company culture and including any planned remedies.

SUPPORTING STATEMENT: The report should be prepared within one year of the annual meeting, at reasonable cost and excluding proprietary and privileged information. For its analysis, the board is encouraged to consider soliciting outside expertise on racism in corporate cultures in conjunction with eliciting feedback from employees through forms of communication such as focus groups or anonymous employee surveying on indicators of structural racism and its effects. In its discretion, the board may include assessment of whether company policies or unwritten norms:

Yield inequitable outcomes for employees based on race or ethnicity such as patterns of hiring, retention, upward mobility, disciplinary action, allocation of “stretch assignments” (projects intended to develop employee skills and abilities), sponsorship, or usage of benefits;
Consider “cultural fit” rather than merit and capabilities or create “prove it again” biases (wherein employees of color are forced to prove their capabilities repeatedly);
Establish a cultural hierarchy through permitting racial microaggressions (behaviors that stereotype or belittle a minority group), create perceived pressure to code-switch (behavioral adjustments used to navigate interracial interactions), or otherwise suppress cultural identity.

[1] https://www.penguin.co.uk/articles/2020/june/ibram-x-kendi-definition-of-antiracist.html

[2] https://hbr.org/2020/06/confronting-racism-at-work-a-reading-list

[3] https://ssrn.com/abstract=3946604

Enhanced Water Risk Disclosure

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