Data Centres

First Street's analysis shows the dominant theme: global data center capacity is highly exposed to both acute hazards (79% at risk from flooding, extreme winds and wildfires) and chronic stress (just over half facing extreme heat and drought), which threatens operations, efficiency and costs.

Exposure varies sharply—Asia‑Pacific 89% acute, the Americas 50%, EMEA 46%, with Nordics lowest—and the report warns that most underwriting still relies on historical data, urging investors to factor climate change into site selection, capital allocation and infrastructure choices (for example, Digital Realty's roughly 300 waterless or closed‑loop cooled sites); watch insurance, downtime and cooling strategies.

Tracking: Data Center · Data Centre

Geography: Global, United States (Northern Virginia/Ashburn, Silicon Valley/Santa Clara, Dallas/Ft.

Worth, Chicago, New York, Phoenix, Los Angeles, Seattle), United Kingdom (London), Germany (Frankfurt), Netherlands (Amsterdam), Ireland (Dublin), France (Paris), Singapore, Hong Kong, Japan (Tokyo), Australia (Sydney), India (Mumbai, Bangalore), China (Beijing, Shanghai, Shenzhen), Brazil (São Paulo), United Arab Emirates (Dubai), South Africa (Johannesburg)

1. Nearly 80% of data center capacity faces elevated climate risk

A First Street study finds 79% of global data center capacity faces acute climate hazards — flooding, extreme winds and wildfires — that can disrupt operations, increase downtime and raise insurance and repair costs.

The analysis covered 97 global data center markets and also found just over half of capacity is exposed to chronic climate stress, such as extreme heat and drought, which undermines energy efficiency and raises operating costs.

Exposure varies sharply by region: Asia-Pacific has 89% of capacity at acute risk, the Americas 50%, and Europe, the Middle East and Africa 46%, while Nordic markets showed the lowest risk.

First Street leaders warn that "most underwriting for real assets still uses historical data," urging investors to factor climate change into site selection and capital allocation; Digital Realty is cited as running roughly 300 waterless or closed-loop cooled data centers.

Key facts:

- 79% of global data center capacity faces acute climate hazards

- Study author: First Street, a climate risk analytics firm

- Analysis covered 97 global data center markets

- Just over half of capacity exposed to chronic climate stress

- Asia-Pacific: 89% of capacity at acute risk

Why it matters: Operators and owners in high-risk markets face higher downtime, repair and insurance costs, and chronic heat or water stress increases operating expenses.

Investors, insurers and planners who continue relying on historical models risk mispriced assets; those who adopt climate-informed underwriting, resilient designs and system-level planning should gain a competitive advantage.

Watch for shifts in capital allocation, insurance terms, site selection criteria, and broader adoption of water-efficient cooling and community-level infrastructure resilience measures.

CNBC