Even Data Centres Aren’t Safe From Climate Change, New Report Flags Risks To Global Digital Backbone

Climate change, already disrupting lives, economies, and ecosystems across the world, is now threatening our digital lives too. Data centres, the critical infrastructure that powers the global digital economy being the backbone of banking, emergency services, logistics, and communication networks, are facing mounting risks from extreme weather events, a new global report has warned.

Extreme weather events like floods, cyclones,Dta forest fires, and rising sea levels and resultant coastal inundation are putting these “silent engines” in danger, says the report released by the Cross Dependency Initiative (XDI), a leading climate risk analytics firm. Without urgent action, it says, the world could see more service disruptions, skyrocketing insurance costs for operators, and billions of dollars in damages.

The '2025 Global Data Centre Physical Climate Risk and Adaptation Report' analysed nearly 9,000 operational and planned data centres worldwide, and said many of them are already at risk in 2025, with the danger set to worsen by 2050. The most vulnerable areas include major data hubs like New Jersey (USA), Shanghai (China), Tokyo (Japan), and Hamburg (Germany).

“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,” said Dr Karl Mallon, Founder of  XDI.

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India Among Global Hotspots

India features prominently in XDI’s global climate risk ranking. Uttar Pradesh ranks second worldwide for the highest percentage of high-risk data centres, with 61.9% of its facilities projected to face serious climate-related hazards by 2050. Tamil Nadu and Maharashtra are also listed among the top 50 global risk zones, with 10.3% and 5.7% of their data centres, respectively, categorised as high risk.

Cities such as Navi Mumbai, Noida, Chennai, and Bangalore host many of India’s data hubs and are particularly vulnerable. The report notes that more than 12% of India’s data centres could be at high risk by 2050, with overall risk projected to almost triple by the end of the century.

Global Outlook Grim

The analysis ranks the top 100 global data centre hubs by their exposure to eight climate hazards, including flooding, tropical cyclones, forest fires, and coastal inundation.

The report paints a worrying picture for the decades ahead.

By 2050, it says, major data centre hubs in New Jersey, Hamburg, Shanghai, Tokyo, and Bangkok are projected to see 20-64% of their facilities at high risk of climate-related damage.

The Asia-Pacific region, the world’s fastest-growing market for data centres, also faces some of the highest risks, with more than 1 in 10 data centres already considered high risk in 2025. This figure may rise to 1 in 8 by 2050.

Global insurance costs for data centres could triple or quadruple by 2050 if decisive mitigation and adaptation measures are not taken, according to the report.

XDI’s study shows how structural adaptations — redesigning and upgrading facilities — can dramatically cut these risks and prevent runaway insurance costs. Targeted investments could save operators billions of dollars annually, the report notes.

Insurance and Adaptation

The growing threat has already begun impacting the insurance sector. Global insurance losses from natural disasters exceeded $135 billion in 2024, with data centre damages contributing significantly to the total.

XDI’s analysis suggests that targeted investments in structural resilience could reduce the number of high-risk data centres by over 70% by 2050. Such measures could also help operators manage escalating insurance costs.

Underscoring how climate risk is highly location-specific, with data centres in the same country likely to face dramatically different threats, the report states that no amount of structural hardening will fully protect the data centres if the supporting infrastructure such as roads, water supply, and power grids remains vulnerable.