Global Data Centres at Risk From Climate Change: Report

The report quantifies how targeted structural adaptations can dramatically improve resilience, reduce risk, and help curb escalating insurance costs

Data centres that power critical infrastructure—are facing sharply rising risks from climate change-driven extreme weather. A report by Cross Dependency Initiative (XDI), specialist in physical climate risk and adaptation analytics stated that without urgent investment in emissions reduction and physical adaptation, operators could face soaring insurance premiums, growing disruption to operations, and billions in damages.

Analysis 

The report analysed around nearly 9,000 operational and planned data centres worldwide. It found that data centres in New Jersey, Hamburg, Shanghai, Tokyo, Hong Kong, Moskva, Bangkok and Hovestaden are all in the top 20 for climate risk by 2050, with 20-64% of data centres in these hubs projected to be at high risk of physical damage from climate change hazards by 2050.

Asia Pacific is the fastest growing region for data centres in the world and it also carries some of the greatest risks, with more than 1 in 10 data centres already at high risk in 2025, and are on the way to becoming more than 1 in 8 by 2050.

India has 228 data centres in total and Uttar Pradesh (UP) emerged as the most vulnerable region, ranking 2nd globally in the analysis. There are 21 data centres in UP and the risk of damage to data centre infrastructure from climate change hazards is projected to more than double (111%) by the end of the century.

The report estimated that 6.25% of data centres worldwide are currently at High Risk and it will increase by 14% in the next 25 years. The report also looked at the increase in risk of damage across all data centres and from all hazards from 2025 until 2100, with some hubs seeing a projected increase of 600 to 1000%.

Dr Karl Mallon, founder of XDI said, “Data centres are the silent engine of the global economy. But as extreme weather events become more frequent and severe, the physical structures underpinning our digital world are increasingly vulnerable.” 

Targeted Investments Can Save Billions in Damages 

The report highlighted that climate risk varies dramatically by location, even between data centres in the same country or region. This analysis is critical for guiding smarter investment decisions in new and existing data centres — helping asset owners, operators and investors allocate capital where it will have the greatest impact on protecting long- term value.

The report also reinforced that decarbonisation and adaptation must go hand in hand to safeguard the digital economy for the long term.

Environmental Impact of Data Centres

It is important to also consider that data centres themselves are responsible for 1-1.15% of global electricity use and nearly 1% of greenhouse gas emissions, according to the International Energy Agency. The environmental footprint of data centres not only includes energy and carbon emissions, it also includes water usage, land use, and electricity waste generation.

A report by Cornell University estimated that AI demand alone could require 4.2–6.6 billion cubic meters of fresh water annually by 2027 to cool servers from overheating.

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