A report from First Street, a climate risk analytics firm, found that nearly 80% of datacenters are exposed to extreme climate hazards, including flooding, extreme winds and wildfires. The research indicates that these climate impacts render datacenter infrastructure vulnerable to disrupted operations, increased offline periods, and inflated insurance and repair costs.

Chronic climate risk factors, such as routine extreme heat and drought, affect 54% of global datacenter markets. The report analyzed 97 global datacenter markets. The Americas region has 86% of its datacenter capacity in markets with elevated risk for flood, wind, and wildfire exposure. The Asian-Pacific region has 60% of its datacenters in markets with elevated risk for flood, wind, and wildfire, and an 89% exposure rate to heat and drought risks.

In Europe, the Middle East, and Africa, 25% of datacenters are located in elevated-risk markets for flood, wind, and wildfire. Forty-six percent of datacenters in Europe, the Middle East, and Africa are vulnerable to heat and drought. Approximately 50% of U.S. datacenters are vulnerable to heat and drought, and about two-thirds of upcoming U.S. datacenters are planned for areas experiencing drought. U.S. datacenters typically require a large amount of water to operate.

The Carolinas, Atlanta, the New York-New Jersey region, and northern Virginia are among the 10 most exposed U.S. regions to acute and chronic climate threats. Johor in Malaysia and Marseille in France are among the most vulnerable datacenter markets. Helsinki in Finland is considered a lower-risk region for datacenters.

Jeremy Porter, chief economist at First Street, stated, "Where you build a data center determines a large share of what it will cost to run for the next 20 or 30 years." He added, "Climate is a big part of that: cooling, water, and reliability all depend on location." Matthew Eby, founder and CEO of First Street, said, "Most underwriting for real assets still uses historical data, but the climate is no longer behaving the way the historical record would predict." Eby added, "As heat, drought, and water stress increase, outdated models simply don't offer a complete view of risk anymore."

A March finding from Swiss Re, a Swiss reinsurance company, indicated that new datacenters globally are increasingly being placed in areas prone to climate risks like hail and tornado activity.