First Street Flags 79% of Data Center Capacity at Climate Risk, With Asia-Pacific at 89%
Updated
Updated · CNBC · Jun 18
First Street Flags 79% of Data Center Capacity at Climate Risk, With Asia-Pacific at 89%
1 articles · Updated · CNBC · Jun 18
Summary
79% of global data center capacity sits in markets exposed to acute climate hazards such as flooding, extreme winds and wildfires, according to First Street’s study of 97 markets.
Just over half of data centers also face chronic stress from extreme heat and drought, which the firm says can erode energy efficiency, raise costs and inflict bigger long-term financial damage than single events.
89% of Asia-Pacific capacity is at risk versus 50% in the Americas and 46% in Europe, the Middle East and Africa; fast-growing hubs including Northern Virginia, Johor and Marseille were among exposed markets.
20- to 30-year asset lives leave investors vulnerable if they rely on historical underwriting models that miss heavier rainfall, water stress and infrastructure weak points beyond the building itself.
300 data centers in Digital Realty’s portfolio already use waterless or closed-loop cooling, underscoring how operators are starting to adapt even as First Street warns broader community and power-system risks remain.
With trillions invested in vulnerable data centers, is the AI boom creating the next massive climate-related financial bubble?
Will the global map of digital power be redrawn by the search for climate-proof locations for data centers?
With AI demanding immense resources, can Big Tech's sustainability promises ever be more than just greenwashing?
Global Data Centers at Risk: Climate Threats, Resource Strain, and the Urgent Need for Resilience (2026 Report)
Overview
Global data centers are facing growing climate threats, especially in fast-growing markets like Northern Virginia, Johor, and Marseille, while Nordic regions remain less exposed. These centers depend on vulnerable infrastructure such as roads and water supply, and their continuous operation creates significant heat, requiring large amounts of electricity and water for cooling. As electricity demand rises rapidly, the risk to both data centers and their supporting systems increases. This situation highlights the urgent need for both decarbonization and adaptation strategies to ensure the resilience and sustainability of digital infrastructure in a changing climate.