Building Climate Resilience Into The Construction Industry

(Photo: Brian Yap/flickr)

This past year offered a glimpse of what a warmer world could bring. Multiple tornadoes left a trail of destruction across the midwestern United States. Fatal rains inundated vast swathes of land from China to South Sudan. Forest fires burned through millions of acres around the Mediterranean Sea.

The list of extreme events keeps growing even as populations living in hazardous areas continue to become more dense.

The cost of rebuilding is also increasing. According to some estimates, disasters caused $210 billion worth of damage around the world in 2020: that’s about a third more than in 2019. In the most exposed countries – such as in the Caribbean – rebuilding after a disaster may become prohibitively expensive. In 2017, for instance, Hurricane Maria cost Dominica around 200% of its Gross Domestic Product.

Investing early to make buildings more resilient and erecting them in more secure locations are crucial ways to save lives, minimize costs, and protect development investments. The net benefit of investing in the resilience of infrastructure in low- and middle-income countries would amount to $4.2 trillion, with $4 in benefit for each $1 invested.

The business case is clear. So why have countries around the world been slower than anticipated to put these principles into practice? Emerging economies face a shortage of reliable data when it comes to assessing the costs and benefits of investing in resilient infrastructure in any given location. These include limited metrics to consistently assess local climate risks and invest in mitigation measures, and lack of disclosure regarding the level of resilience of buildings.

This has made it much more difficult for insurers, developers, investors and governments to make decisions based on real evidence and shape the real estate market of tomorrow.

Several countries have piloted efforts to fill those data gaps. For instance, the government of the Philippines – a hotspot for a range of natural disasters – has developed a mobile application allowing users to generate their own local maps showing the level of hazards associated with volcano eruptions, typhoons and many other potential disasters.

The tool is now being used by the country’s largest financial institution, Bank of the Philippine Islands. The bank evaluates its portfolio and clients’ exposure to physical climate risks and makes key investment decisions accordingly.