Climate risk is threatening data centre – and digital business – resilience

Despite their built-in resilience measures, over half of the world’s top 100 data centre hubs are facing significant climate risk that could jeopardise operations.

A Verisk Maplecroft analysis of climate risks in major data centre locations shows that rising global temperatures are set to increase cooling requirements – and therefore electricity and water demand – over the coming years. This could in turn increase costs and lead to potential power cuts and conflicts with local communities over resources.

“Data centres now form the digital backbone of business. The third-party operators of these facilities represent a critical link in global supply chains, as their services underpin the operations of all multinational organisations,” said Laura Schwartz, Senior Asia Analyst at Verisk Maplecroft. “In an always-on, globally integrated economy, understanding the entire range of risks that can impact their resilience is a board-level imperative that needs mapping out today and into the future.”

The report suggests these risks need to be taken seriously and mitigated, considering that much of the global economy is now reliant on data centres for AI, data storage and digital operations.

Rising temperatures and cooling needs

According to the report, heat waves already constitute a major risk to data centres, forcing operators to shut down to prevent damage from overheating and leading to service disruptions. For example in 2022, UK and US heatwaves caused several data centres to go offline.

Verisk Maplecroft estimates that currently, 56% of the top 100 data centre hubs score as ‘high’ or ‘very high’ risk for ‘cooling degree days’ – days when extreme temperatures trigger extra cooling requirements. But in a high-emissions scenario, this increases to 68% by 2040 and 80% by 2080. The top 100 data centre hubs will on average see an 83% increase in cooling degree days from 2030 to 2080, resulting in higher water and energy usage.

Water stress for data centres

The average mid-size data centre uses about 1.4 million litres of water a day, and the report warns that these requirements are set to increase as temperatures rise. According to its high-emissions estimate, by 2030, 52% of global data centre hubs will be categorised as facing ‘high’ or ‘very high’ water stress risk. By 2050, this rises to 58%. 

Water risks could also lead to social and political crises, with conflicts over access to scarce local water resources. This could in turn threaten data centre operators’ social license to operate.

The Middle East and Africa faced the highest exposure to water stress risks, and half of North America’s top data centre hubs will also score ‘high’ or ‘very high’ risk for water stress in just five years. 

“Data centre operators are innovating solutions to increase resilience and offset sustainability concerns, but rising temperatures increase these challenges,” added Capucine May, Verisk Maplecroft Consultant. “The onus is on operators, customers and investors alike to assess rising climate threats, alongside social and political risk factors – not only for their own resilience, but because of a growing regulatory focus on third-party risk management.”