Climate risks threaten 27% of global data centres by 2050

A new report by climate risk analytics company XDI shows that a growing proportion of data centres worldwide face increasing physical risks linked to climate change, with the threat set to intensify by 2050.

The XDI 2025 Global Data Centre Physical Climate Risk and Adaptation Report analyses nearly 9,000 operational and planned data centres globally, mapping their exposure to physical threats such as flooding, cyclones, forest fires and coastal inundation, both now and under various future emissions scenarios.

Current risks outlined

XDI's analysis finds that, currently, approximately 6.25% of data centres around the world are classed as High Risk, meaning their value at risk exceeds 1% of their total asset value. The report notes: "a high risk of insurance becoming prohibitively expensive or withdrawn entirely" for these sites. A further 15.79% of data centres are at Moderate Risk, with value at risk between 0.2% and 1%, where "insurance is likely to be available, but expensive." In total, 22% of global data centres fall into these high to moderate risk categories under present conditions.

Projections for 2050 under a high-emissions scenario (RCP8.5) indicate that the proportion of High Risk data centres will increase by 14%, reaching 7.13%. At the same time, the proportion of Moderate Risk centres is expected to rise by 24%, reaching 19.6%. This brings the total proportion at risk to 27%. The RCP8.5 scenario represents a global warming trajectory leading to 4.4°C of warming by 2100, which authors describe as "appropriate to use in prudent risk assessment." Projections under a lower-emissions scenario, RCP2.6, are also presented in the report.

Key regional findings

The report ranks data centre hubs - defined as the highest subnational jurisdiction such as state or province - by the proportion of sites projected to be at High Risk by 2050. Data centre hubs in New Jersey, Massachusetts, Oregon, Michigan and Connecticut in the United States, along with Hamburg, Shanghai, Tokyo, Queensland, Bangkok and Jakarta, are listed in the top 20 for climate risk by mid-century. These regions could see between 12% and 64% of their data centre assets facing high risk of physical damage due to climate hazards by 2050.

Some hubs, including New Jersey and Massachusetts, are projected to see an increase in risk of 600 to 1000% over the period from 2025 to 2100, according to XDI's analysis.

The Asia-Pacific region is highlighted as the fastest growing market for data centres. Yet, it is also among the most exposed regions, with more than one in ten data centres already classed as high risk in 2025 - rising to more than one in eight by 2050.

Variation in local exposure

The report underscores that exposure to climate-related hazards varies significantly between locations, even within the same country or region. XDI states: "This kind of like-for-like, jurisdiction-spanning 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."

Insurance and resilience

XDI estimates that insurance costs for data centres could triple or quadruple by 2050 if decisive mitigation and adaptation measures are not implemented. The report suggests that targeted investments to improve resilience could prevent billions of USD in damages each year.

"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," says Dr Karl Mallon, Founder of XDI (Cross Dependency Initiative).

Dr Mallon also commented: "When so much depends on this critical infrastructure - and with the sector growing exponentially - operators, investors, and governments can't afford to be flying blind. Our analysis helps them see the global picture, identify where resilience investments are most needed, and chart pathways to reduce risk."

Potential of adaptation

One significant finding from the report is the effect of structural adaptation. XDI found that targeted structural adaptations - changes in design and construction - could reduce the number of data centres at High Risk by over two-thirds in 2050, although the report acknowledges that such measures are costly.

The report observes, "Adaptation measures applied to the base analysis slashed the number of High Risk data centres by more than 2/3 in 2050."

The need for decarbonisation

Alongside calls for greater resilience, the report emphasises that adaptation alone is insufficient. Climate risk to digital infrastructure will continue to grow without significant progress on reducing emissions. The report states, "without ambitious and sustained investment in emissions reduction to limit the severity of climate change, no amount of structural hardening will fully protect these critical assets."

Furthermore, the report cautions that even the most resilient data centre is only as secure as the infrastructure it relies upon, such as transport, power, water and communications networks, which may themselves be vulnerable to the same hazards.

XDI's new data provides what it describes as the most comprehensive, decision-ready analysis for asset owners, operators, investors and policymakers, helping them quantify and manage the physical risks to digital infrastructure posed by climate change over the decades ahead.