Front Line: extreme weather events factor into location and sustainability decisions

This spring, Houston-based software company Hewlett Packard Enterprise plans to move into a new 440,000 square foot headquarters in Spring, Texas, a few miles northwest of its current location. The move should make the company a little less vulnerable to the kind of flooding that inundated its data centers during a record-breaking rainstorm in 2016, and again the following year during Hurricane Harvey.

Scientists say these types of extreme weather events are becoming more common due to global warming, which is just beginning to impact business siting decisions. Exposure to natural disasters has always been part of the site selection equation, but it’s becoming an increasingly important factor, says Didi Caldwell, president and founding director of Global Location Strategies, a Carolina-based consulting firm. from South. “It has grown in prominence over the past 10 years and has become even more prevalent over the past five years.”

Due to factors related to climate change, “we are seeing companies looking to relocate or build new capabilities in areas they previously would not have considered, Caldwell says. For example, a manufacturing plant based in Southeast Asia could be moved to a location less susceptible to hurricanes and rising seas caused by global warming. “Companies are also bringing their supply chains closer together to avoid some of the risks associated with international trade and locations,” she notes.

Reduce carbon footprints, too
There is also another aspect of the climate risk issue that affects businesses: the growing demand for “low carbon” products and reduced carbon footprints.

Internationally, the most visible example of climate risks affecting location choice is with large technology companies making data center location decisions based on access to renewable energy. “In this sector, this is already leading some countries to win certain projects and others to lose,” said Dieter Billen, director of the consultancy firm Roland Berger, in a recent article by FDI Intelligence. He cited data center projects in Vietnam and Africa where renewable energy has played a major role. And, last October, Google and Facebook bought large plots of land in Denmark for “potential” data center developments, lured by access to renewable energy.

Environmental impact is starting to play a bigger role in facility design decisions, in part because consumers and business customers are increasingly demanding low-carbon products and services, experts say.
In the United States, environmental impact (and its effect on global warming) is beginning to play a bigger role in facility design decisions, experts say, in part because consumers and business customers are demanding more in addition to low-carbon products and services. For example, last year Bendix Commercial Vehicle Systems completed the installation of a 1.168 megawatt solar panel at its large manufacturing facility in Huntington, Indiana, decreasing its dependence on the local power grid and reducing the company’s carbon footprint.

The company says the Huntington solar panel will help reduce Bendix’s carbon footprint in North America by 3%. It will meet about 30 percent of Huntington’s Plant 1 energy needs and is expected to reduce the campus’ carbon footprint by nearly 19 percent, Bendix officials say. Additionally, in 2020, Bendix has diverted 99.9% of its waste from landfills, and over the past six years the company has reduced its energy consumption by more than 14 million kilowatt hours.


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