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A new study concludes that nearly 80% of data center capacity worldwide carries elevated exposure to climate hazards, spanning acute events such as flooding and fire and chronic conditions including extreme heat.
For investors with exposure to data center infrastructure, the figure reframes physical risk from a tail concern into a baseline underwriting assumption that belongs in every valuation model.
The Two-Track Risk Problem The study draws a clear distinction between acute risk — discrete climate events capable of damaging or destroying physical infrastructure — and chronic risk, which accumulates through sustained environmental stressors such as extreme heat.
Both categories bear on operating costs and asset longevity, though they present differently in a financial model.
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