First Street: 79 percent of global data center capacity facing "acute climate hazards"

79 percent of global data center capacity is facing "acute climate hazards,” according to a report by climate risk financial modeling firm First Street.Based on an analysis of 97 global markets identified by real estate consultancy Cushman and Wakefield, acute exposure to these hazards, which include flooding, wind, and wildfire, is highest in the Americas, where 86 percent of data centers face these risks. This is followed by APAC (60 percent) and EMEA (25 percent).It also claims that 54 percent of global data center capacity operates under “chronic stress conditions” like extreme heat or water scarcity.On a regional basis, the report claims that this exposure rises to 89 percent in APAC, compared to 50 percent in the Americas and 46 percent in EMEA.Major hubs like Northern Virginia, Johor, and Marseille are in the report’s highest climate-risk tier.“Exposure to extreme heat, water stress, flooding, wind, and wildfire can materially affect power availability, cooling efficiency, insurance costs, and uptime, reshaping true site readiness beyond baseline infrastructure,” reads the report.“Most underwriting for real assets still uses historical data, but the climate is no longer behaving the way the historical record would predict. As heat, drought, and water stress increase, outdated models simply don’t offer a complete view of risk anymore,” said CEO and founder of First Street Matthew Eby.“Investors who incorporate these factors into underwriting and capital allocation decisions will be better positioned to identify resilient markets and avoid mispriced risk.”It seems as though the report is calculating exposure with reference to the capacity – not the number – of data centers in a given market, based on the fact that the report includes a map which sorts markets by their total capacity.DCD has reached out to First Street to confirm.The increasing quantity, size, cost, and geographic spread of data centers have, in turn, increased the chance that a data center may be affected by a climate event.Last July, XDI, a separate climate risk analysis firm, also penned a report claiming that data centers were facing increasing risks from climate change-induced extreme weather.