Consequences of climate hazards to the technology system FIGURE 17 The impact of extreme heat on data centres already installed in London could result in annual financial losses of $472 million by 2035, rising to $695 million by 2055 under a high emissions scenario.102 Water stress impacts mining and manufacturing The technology sector is also exposed to concentrated supply chains for scarce resources. As much as 70% of critical mineral extraction may be exposed to droughts by 2050.103 The majority of mines and production sites for lithium and copper are concentrated in areas already facing water stress (50% and 80%, respectively). Methods used to mine critical minerals require huge amounts of water for separating, cooling machinery and controlling dust. A severe drought in Taiwan in 2021 jeopardized nearly two-thirds of the world’s semiconductor manufacturing capacity, leading to increased costs and extended lead times for vital components across various tech sectors.104 Water scarcity will become a threat not only to manufacturers but to all stakeholders. History demonstrates how conflicts over water resources can disadvantage local communities in places like Chile’s Salar de Atacama, where lithium and copper extraction consumed over 65% of the local water supply and deprived local Indigenous farming communities of resources that their livelihoods depended on.105 AI data centres drive up water demand The rapid growth of AI amplifies pressure on clean energy and water sources. Over the next three Extreme heat Wildfire Tropical cyclone Coastal flooding Fluvial flooding Water stress DroughtRaw materials extractionHardware operationsTechnology end- user productsData centres and AIConnectivity Mining, extraction and separation of raw metals & minerals and rare earth elementsProduction, assembling and transport of electronic devices, EVs, renewable energy technology, batteries and semi-conductorsElectronic devices, EVs, renewable energy technology, batteriesOperation and maintainance of data transfer and storage infrastructureInfrastructure: base transceiver stations (BTS), baseband units (BBU), submarine communication cables Dominant hazards Lack of water for extractionPower outagesOverheating of electronic devicesOverheating of data centresInfrastructure damage Conflicts over water supplyInfrastructure damageReduced battery efficiencyIncreased demand for water for coolingService interruptions Threats to worker safety, health & well-beingLack of water for productionBattery degradationConflicts over water supply Spills of hazardous wasteLoss of valuable materials from e-wasteCompetition for renewable energy resources Danger to hazardous waste-management infrastructure Severe drought in Taiwan in 2021 jeopardized nearly two-thirds of the world’s semiconductor manufacturing capacity, leading to increased costs and extended lead times for vital components. Business on the Edge: Building Industry Resilience to Climate Hazards 34

Business on the Edge 2024