This year is another challenging one for the planet, with Asia Pacific again carrying much of the climate burden. Hong Kong experienced one of its heaviest periods of rainfall in September, and weeks later Typhoon Koinu forced the closure of its stock exchange. Indonesia has endured a prolonged drought, longer and drier than the previous years. Meanwhile, back in May, Singapore recorded a record-high temperature of 37 degrees.
While we need to take care in drawing straight lines between individual weather events and climate change, the trend is clear. Extreme conditions, including rain, heat, and drought, are increasingly chronic rather than episodic.
It’s in this context that some of the biggest names in cloud computing, social media, and e-commerce are taking steps to reduce their carbon footprints and committing to powering their operations from renewable sources by the end of the decade.
That will make a difference. Energy-hungry data centres account for nearly 2 per cent of electricity consumption worldwide and 7 per cent here in Singapore. Understandably, data centre operators are keen to be on the right side of what has come to be seen as the defining crisis of our time.
The data centres that crunch, store, and distribute the data your device needs to stream videos, book a taxi or even read this article already account for 4 per cent of greenhouse emissions, according to research published last year by real estate consultancy JLL.
As our economies become more digital, the data sector’s demand for electricity doubles every four years, according to the report.
Big tech, green pockets
The same JLL survey of 505 data centre managers in Asia showed improving environmental, sustainability, and governance goals were top priorities. One of the ways businesses can do this is by engineering resilience into data centre operations. A resilient data centre is one that can withstand natural disasters, power outages, and other disruptions without impacting its operations. By making a data centre more resilient, businesses can reduce their carbon footprint and become more sustainable.
For example, having a plan to be more energy efficient while squeezing out better performance in hotter and wetter conditions can pay financial and environmental dividends. Rooftop solar panels are popular in property-scarce markets like Singapore. Similarly, integrating renewable energy sources such as battery energy storage systems eases reliance on higher-risk diesel-powered generators, providing a store of excess energy at the ready to prevent power outages.
Engineering in resilience, engineering risk out
The first step in any plan is to identify potential risks to property and business continuity, which now also includes climate impact. Knowing where and how businesses are most vulnerable can help data centre operators direct the appropriate financial and technical resources to where they are needed to improve the resilience and sustainability of their operations. The key to guiding these investments is robust engineering-based data.
The 2023 FM Global Resilience Index ranks 130 countries and territories according to the relative resilience of their business environment. The Index is designed to help businesses and organisations assess the risks and opportunities associated with operating in different parts of the world.
It can be used to inform decisions about where to invest, where to locate operations, and how to manage risk, supported by almost two-centuries of engineering-based data gathered in the protection of property assets around the world. Singapore continues to rank highly among 130 countries ranked by the Index, reflecting the continued resilience of its systems and infrastructure in the face of evolving geopolitical, economic, and climate risks.
Last year, we introduced a suite of first-of-their-kind climate resilience products for our clients, which include a quarter of all Fortune 500 companies. Wind, flood, wildfires, hail, extreme cold, as well as lightning strikes are among climate risks measured in these bespoke reporting tools.
These reporting tools and the insight that supports them help data centre operators and other businesses understand their potential climate risk and make informed investment decisions, with data that show losses stemming from typhoons, flooding, and other extreme weather events are 30 times more likely to occur at commercial properties with the highest climate risk. Our own data indicate that damages at the most vulnerable sites are 180 times more severe than at properties deemed the safest.
Two sides of the same coin
A warming climate only whets the appetite of an electricity-hungry industry. Even regulators in relatively climate resilient Singapore have signalled they aren’t taking chances.
In June, Singapore's Infocomm Media Development Authority said it will require operators to increase their air conditioning settings up four notches to 26 degrees Celsius. With cooling the single-biggest expense operators face, the adjustment of four degrees could shave up to a fifth off an operator’s electricity bill, according to the Authority.
It also makes systems more resilient to a warming planet, but at the same time, sends a strong signal to data centre operators that they need to prepare for the challenges posed by a changing climate.
Sustainability and mitigating climate risk have become two sides of the same coin. Mastering engineering and climate risk data is key to tackling potential threats from climate risks. When operators engineer in resilience and sustainability, they are engineering out the risks from climate change.
This article first appeared in Asia Insurance Review.