Most data centers vulnerable to floods and extreme winds: Study
What's the story
A recent study by climate risk analytics firm First Street has revealed that nearly 80% of global data centers are vulnerable to extreme climate events. These include floods, wildfires, and extreme winds. The research highlights how these risks can disrupt operations, increase downtime, and raise insurance and repair costs for these critical infrastructures.
Risk assessment
Long-term cost implications
Jeremy Porter, Chief Economist at First Street, emphasized the long-term cost implications of data center locations. He said, "Where you build a data center determines a large share of what it will cost to run for the next 20 or 30 years." The study also found that chronic climate risk factors like extreme heat and drought affect 54% of global data center markets.
Data inadequacy
Flaw in risk assessment models
Matthew Eby, founder and CEO of First Street, criticized the reliance on historical data for real asset underwriting. He said, "Most underwriting for real assets still uses historical data, but the climate is no longer behaving the way the historical record would predict." This highlights a major flaw in current risk assessment models that fail to account for changing climate patterns.
Regional vulnerability
Regional variations in climate risk exposure
The study analyzed 97 global data center markets and found regional variations in climate risk exposure. The Americas account for 86% of their capacity in high-risk markets for floods, winds, and wildfires. Meanwhile, the Asia-Pacific region is most vulnerable to heat and drought with a staggering 89% exposure rate.
At-risk areas
Regions most exposed to climate threats
In the US, regions like the Carolinas, Atlanta, New York-New Jersey area, and northern Virginia are among the top 10 most exposed to acute and chronic climate threats. Other fast-growing data center markets such as Johor in Malaysia and Marseille in France also rank high on this vulnerability scale. This trend shows that expansion is happening where operating conditions are toughest rather than easiest.
Wider impact
Far-reaching effects
Porter warned that climate-fueled disruptions to data centers can have far-reaching effects, impacting those who rely on these infrastructures. He said, "Datacenters run the digital services people and businesses rely on."