How We Manage Our Climate Risk
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 centers 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.
At CyrusOne, we think about our climate risk in terms of how the changing climate might impact our business. We understand that even if we mitigate our own climate impact (Read about how we manage our climate impact here) by reducing carbon emissions to zero, we will still need to prepare for the effects of climate change. Our approach to understanding and addressing climate risk is multi-faceted.
Some of our 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. We 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 our Environmental Impact Assessments and Protected Areas Assessments we are able to avoid some barriers by avoiding sensitive lands that both affect local biodiversity and slow project development. By reducing our facilities’ natural resource demand and improving wildlife habitat in the areas where we operate, we demonstrate benefits to local communities. This also allows us to rely less on natural resources like water, buffering our business sustainability.
In most data centers, water is commonly used for cooling purposes, replacing electricity or other energy sources. However, we recognize that water is a limited resource in high demand, meaning that issues with water supply could reduce our 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 minimize our water risk, we conduct annual Water Risk Assessments to understand our 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, such as our Chandler, Carrolton, and Allen facilities. 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 climactic conditions. Our Future Flood Risk Assessments use a variety of tools to consider the effects of different climate change projections on the flood risk at our facilities. This allows us to anticipate any additional risk in the future to existing facilities and develop mitigation strategies when needed. This assessment also serves our 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. Our Carbon Pricing Assessments helps us understand how increased carbon prices might impact our own business situation, as well as how they may affect our customer’s priorities and requirements. We have learned that our highest risk from carbon price increases comes in the form of higher costs for carbon-intensive electricity. This analysis helps us to understand our business vulnerability under expected carbon pricing increases, driving us to reduce our climate impact by boosting our energy efficiency and acquiring renewable energy for all facilities, and provides us with a way to prioritize improvements in regions where the carbon emissions from grid electricity are highest.
We plan to employ additional assessments and strategies to further understand our 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 centers to further risk. This is one more example of how data center resilience and sustainability are intertwined.