Climate Risks Threaten Nearly 80% of Global Data Center Capacity

While the industry prioritizes power availability and connectivity, the physical reality of climate change is quietly reshaping asset values. First Street’s analysis of 97 global markets reveals that 54% of capacity faces chronic stress from extreme heat and drought, which directly undermines efficiency and inflates cooling expenses. Regional disparities are stark: 89% of capacity in the APAC region faces chronic exposure, compared to 50% in the Americas and 46% in EMEA.

Major growth hubs, including Northern Virginia, Johor, and Marseille, are now categorized in the highest risk tiers. Dr. Jeremy Porter, Chief Economist at First Street, noted that location dictates the cost of running a facility for decades, yet current valuation models frequently treat climate as a secondary concern. The report suggests that reliance on historical data is failing to capture modern environmental volatility, leaving investors vulnerable to mispriced assets as they race to double global capacity by 2030.