First Street: Data Center Climate Risk
Analysis based on 6 articles · First reported Jun 18, 2026 · Last updated Jun 18, 2026
The report by First Street highlights significant climate risks to global data center capacity, with 79% facing acute hazards. This could lead to increased operating costs, downtime, and insurance expenses for data center operators, potentially impacting their profitability and long-term asset values. Investors may re-evaluate their strategies, favoring lower-risk Nordic markets over high-risk hubs like United States — Northern Virginia, Malaysia — Johor, and France — Marseille.
First Street has released new research titled 'Climate Risk in Global Data Center Markets: Implications for Investment and Performance,' revealing that a significant portion of global data center capacity is exposed to climate hazards. The study, published on June 18, 2026, found that 54% of capacity faces chronic climate stress (extreme heat, drought) and 79% faces acute hazards (flooding, wind, wildfire). Major growth markets, including United States — Northern Virginia, Malaysia — Johor, and France — Marseille, are identified as high-risk areas, while Nordic markets are considered less exposed. Jeremy Porter and Matthew Eby of First Street emphasize that climate risk is becoming a critical factor in data center investment performance, influencing operating costs, infrastructure reliability, and asset values, urging investors to incorporate these factors into their underwriting.
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