It is becoming more evident every year that companies must understand their climate risk in order to achieve long-term success. No longer a far-off threat, the impacts of climate change are being felt worldwide in the form of increased storm intensity, devastating wildfires, and massive flooding. Data centres cannot just continue as usual and expect to prosper – instead, we must learn to predict and prepare for future conditions to keep the internet running.
Climate risk can be thought about in terms of how the changing climate might impact business goals and progress. At CyrusOne and as an industry, we understand that even if we mitigate our own climate impact by reducing carbon emissions to zero, we will still need to prepare for the effects of climate change. With this, our approach to understanding and addressing climate risk is multi-faceted.
Some of the industry’s climate risks are associated with our license to operate, while others are direct risks to our facilities. Local laws, regulations, or public perception may limit our ability to develop new facilities in a particular region or restrict areas where we wish to build. At the same time, our facilities may use limited local natural resources and may be located in areas vulnerable to natural disasters. Companies can address these barriers to operation risks by conducting climate risk assessments to better understand our current and future risk, as well as limit the local impacts of our facilities by design.
Through Environmental Impact Assessments and Protected Areas Assessments, it’s possible to avoid some barriers by avoiding sensitive lands that both affect local biodiversity and slow project development. By reducing a facilities’ natural resource demand and improving wildlife habitat in the areas where it will operate, the industry can demonstrate benefits to local communities. This also allows the industry to rely less on natural resources like water, buffering our business sustainability.
In most data centres, water is commonly used for cooling purposes, replacing electricity or other energy sources. However, water is a limited resource in high demand, meaning that issues with water supply could reduce access to water for operations or increase friction with local communities. This becomes more likely each year as climate change is increasing water stress in many places. Facilities dependent on water for cooling may face operational interruptions or require costly retrofits to keep operating under high water stress.
To minimise water risk, annual Water Risk Assessments can help to understand water use, regional water stress, and associated water risk under current and future climate scenarios. These assessments help us reach our goal to be as water efficient as possible and even net positive water in regions with high water stress. At CyrusOne, most of our facilities use water-free cooling, and we have begun to acquire BEF Water Restoration Certificates® (WRCs) to restore water to local ecosystems, making our presence a net benefit to the watersheds where we operate.
Climate change is also predicted to increase the likelihood of flooding due to sea level rise and excessive rainfall events. Sea level rise will cause flooding in regions near coasts and increase the range of impacts from severe coastal weather events like hurricanes. However, publicly available government flood maps (such as US FEMA or UK Environment Agency maps) rely on historical data and don’t always provide an accurate flood risk outlook under predicted future climatic conditions. Future Flood Risk Assessments use a variety of tools to consider the effects of different climate change projections on the flood risk at existing and planned facilities. This allows operators to anticipate any additional risk in the future to existing facilities and develop mitigation strategies when needed. This assessment also serves new building site selection process by informing the holistic flood risk of potential sites.
Climate Impact and Climate Risk overlap on the topic of carbon. Carbon Pricing Assessments can help us understand how increased carbon prices might impact business situations, as well as how they may affect customer priorities and requirements. The highest risk from carbon price increases comes in the form of higher costs for carbon-intensive electricity. This analysis can also help understand business vulnerability under expected carbon pricing increases, driving businesses to reduce climate impact by boosting energy efficiency and acquiring renewable energy for all facilities, and providing a way to prioritise improvements in regions where the carbon emissions from grid electricity are highest.
The data centre industry must employ additional assessments and strategies to further understand exposure to climate risk, an important aspect of managing business risk. Natural disasters, such as extreme heat and wildfires, are expected to increase in occurrence as climate change worsens, exposing data centres to further risk. This is one more example of how data centre resilience and sustainability are intertwined.
