Business on the Edge 2024

3.3 Built environment socio-economic system Data overview – built environment system BOX 4 Cities support over 80% of global GDP and house 56% of the global population.75Physical investment and economic activities in cities account for 70% of global GHG emissions.76Buildings and transport are among the largest emitters.77By 2050, built environments are set to double in size.14 of the world’s 17 largest cities are coastal. Built environments are predicted to double in size by the middle of this century and climate-driven migration will further intensify urbanization.78 With such high demand and increasing pressure on resources,79 cities will struggle to provide adequate living conditions for expanding and shifting populations.Climate hazards threaten the construction, use and lifetime value of built environments. As extreme weather events such as tropical cyclones, wildfires and floods intensify, the costs to build, maintain and recover infrastructure rise.80 These hazards have direct financial consequences, including supply chain disruption and material scarcity, declining net asset values, increased costs, revenue losses and higher capital expenses, all of which undermine long-term returns. Consequences of climate hazards to the built environment system FIGURE 15 Extreme heat Wildfire Tropical cyclone Coastal flooding Fluvial flooding Water stress DroughtMaterials, manufacturing & logisticsConstructionUsage, maintenance & renovationInsurance & reinsurance, financingEnd of use Materials extraction, processing and production; collaboration with suppliers, equipment arrangementConstruction processUsage, maintenance and renovationPurchasing insurance and acquiring fundsReuse, redesign, recycling, incineration, landfill Dominant hazards Disturbance of raw materials extractionSupply chain & logistics delaysPhysical damage to property & infrastructureReduced insurance coverage or refusal to insureIncreased risk of damage & collapse Raw materials scarcityDirect damages to equipment & construction sitePower outages Higher insurance premiumsHigher waste-management costs Disruption of raw materials processingIncreased risk of construction disasterIncreased energy demand & inefficiencyReduced funds Transportation disruption due to physical obstaclesImpaired performance of building materialsHigh maintenance frequency & repair costsHigher interest rates Threat to workers’ safety, health & well-beingThreat to workers’ safety, health & well-beingThreat to residents’ safety, health & well-beingIncreased risk of default or insolvency Supply chain & logistics delaysProperty devaluation Business on the Edge: Building Industry Resilience to Climate Hazards 30