About the authors
Katie Simmonds, Legal Director in the digital team at Womble Bond Dickinson in London
Ana Maria Gutiérrez, Partner in the energy and natural resources team at Womble Bond Dickinson in Denver, CO
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The increased adoption of artificial intelligence by fintechs is being mirrored by a marked increase in regulations requiring the reporting of energy use by technology providers. This is in response to the enormous power demands of AI for computing, cooling and ventilation, which is. putting pressure on electricity grids that still rely, in part, on fossil fuels, contributing to growing concern over AI’s long-term sustainability.
In the US, UK and EU the divergence in approach to regulation are making for a complex array of reporting requirements for not only AI providers but also the fintech firms that are looking to leverage their capabilities. International firms must stay up to date with the latest regulatory changes in order to remain compliant but also be competitive.
The UK
The UK's primary regulation governing the recording and reporting of energy usage by AI is the Streamlined Energy and Carbon Reporting framework (SECR). Under SECR, large companies must report their energy use, greenhouse gas emissions, and energy efficiency actions in their annual reports. A large company or LLP is one that meets two of the following requirements: at least 250 employees, annual turnover of more than £36 million, or an annual balance sheet of more than £18 million.
Companies caught under SECR must disclose greenhouse gas emissions directly generated by the company and indirectly generated from purchased energy – this would cover emissions from a fintech's own IT infrastructure. Companies are also encouraged to report indirect emissions generated throughout their supply chain. Where a fintech uses third-party data centre, cloud or AI services then they will need to decide whether to report those emissions, which, although voluntary, many choose to disclose. In their annual report, companies must also explain the actual and potential impacts of climate-related risks and opportunities on their businesses, strategy, and financial planning.
Fintech firms leveraging AI for credit scoring, fraud detection, or algorithmic trading may also face indirect compliance obligations through contractual requirements or client due diligence. Increasingly, institutional investors and banking partners expect fintechs to demonstrate awareness of sustainability risks in their AI supply chain. Early integration of ESG reporting into vendor assessments can help fintechs avoid reputational and operational risk.
The EU
The EU has gone further, with reporting requirements specifically for data centres. Many fintechs host their services within data centres, so the EU regime will indirectly, but certainly, impact them, especially if they are leveraging AI with its substantial power demands.
The EU’s approach is primarily governed by the Energy Efficiency Directive (EED). The EED requires data centres to report their energy performance and sustainability metrics to a central European database. Compliance began in September 2024, with annual reporting thereafter. The EED applies to data centres with an installed IT power demand of at least 500kW, covering most AI-focused facilities. Data centres must report metrics including energy consumption, power utilisation, temperature set points, waste heat utilisation, water usage, renewable energy adoption, and compute capacity. Aggregated data will be published at EU and Member State levels, promoting transparency.
Fintech firms operating in the EU or serving EU clients may need to verify that their infrastructure partners comply with EED requirements, and as more emissions data becomes available, they may need to be more selective in choosing a data centre for their services. This matters for risk management and for meeting client expectations around sustainability. As ESG-linked financing becomes more common, fintechs that can demonstrate alignment with EU sustainability norms will gain an advantage in attracting capital and institutional partnerships.
The US
The United States does not yet have a unified, mandatory national framework equivalent to the UK’s and EU’s regimes. Instead, several federal and state-level initiatives are emerging, with the biggest states – California and Texas – taking vastly different approaches to fintech, energy policy, and AI regulation.
At the federal level, the proposed Artificial Intelligence Environmental Impacts Act of 2024 aims to establish a reporting system for entities involved in AI development and deployment, though participation remains voluntary. The Act encourages transparency on energy consumption, water usage, and pollution associated with AI systems.
Meanwhile, the Environmental Protection Agency has gone in the opposite direction and issued guidance under the National Emission Standards for Hazardous Air Pollutants (NESHAP), allowing certain fossil-fuel-powered backup engines at data centres to operate up to 50 hours per year in non-emergency conditions to support grid reliability. Similarly Executive Order 14318, signed in July 2025, accelerates permitting for AI-supporting data centres and prioritises dispatchable baseload energy sources, including fossil fuels.
State-level laws are also a mixed picture. Some, such as California’s Climate Accountability Package and New York’s proposed data centre regulations, impose emissions reporting and climate risk disclosures on large companies along similar lines to the UK. These measures indirectly capture fintechs through their reliance on underlying cloud service and data centre providers.
In contrast to California and New York, Texas has signalled a supportive and deregulatory environment for fintechs and their underlying energy needs. For example, earlier this year, Texas became the first state to create – and fund – a state-owned cryptocurrency reserve. Texas has also enacted anti-ESG laws that prohibit state entities from investing or contracting with financial institutions that “boycott” the oil and gas sector, as well as laws that restrict proxy advisory firms from using “ESG factors.”
Undoubtedly, US fintech firms face a fragmented, and sometimes controversial, landscape. While federal rules remain voluntary, state-level ESG and anti-ESG mandates may affect cloud providers and, by extension, fintech compliance obligations. Investors increasingly expect fintechs to demonstrate responsible practices, including sustainability considerations. Firms that adopt voluntary frameworks now, such as NIST’s AI Risk Management Framework, will be better positioned for future regulatory convergence and investor scrutiny.
Looking Ahead
With no unified global approach, fintechs could be subject to multiple reporting regimes depending on the location of their business, customers, and data centre infrastructure. The UK and EU are moving toward mandatory environmental reporting, while the US remains fragmented. For fintechs, this means sustainability and AI governance are no longer peripheral, they are strategic.
Fintech firms that anticipate these trends can turn compliance into a competitive advantage. Transparent reporting and responsible AI practices enhance trust, attract ESG-focused investors, and unlock access to sustainable finance products. In a sector built on trust and innovation, those who combine technological agility with regulatory foresight will lead the next wave of growth.
