Cities Risk Economic Crisis Without Investments in Resilience, New Report Warns

• Uninsurable future: Premiums soaring by 400% in some US counties threaten homes, jobs, and city tax bases.
• Proven returns: Every $1 invested in resilience delivers more than $10 back; Broward County’s flood plan showed a 9% ROI.
• Portfolio approach: New report, Under Pressure, Overdue sets out a Portfolio Approach to help cities design resilience as an investment strategy that builds credibility and attracts capital.

 

A new report from Resilient Cities Network and Tokio Marine Group warns that without a major shift in how cities finance resilience, many risk economic decline and even disinvestment.

According to the report, cities are already paying the price of inaction: insurance premiums are increasing, homes and businesses are becoming more challenging to insure, and capital is beginning to move elsewhere.

The report, “Under Pressure, Overdue: The Portfolio Approach and Financing Cities for Resilience”, highlights the widening protection gap – the growing distance between climate losses and what insurance actually covers – which leaves households and cities dangerously exposed.

The report highlights several existing pathways that cities have followed to address rising premium costs and incorporate resilience into development and investment strategies. For example, in Broward County, Florida, recurring flooding pushed premiums up by more than 400%, pushing officials to model the economic impact, providing evidence that flood defences could deliver a return of at least 9%. Seeing the potential economic impact, local businesses even backed new funding mechanisms.

A further example highlighted in the report showcases steps taken in Cape Town, South Africa, where resilience has been embedded into governance, with a continuous focus on delivery of key targets, backed by audits and transparent reporting. This credibility helped the city secure international financing and an upgraded credit rating.

Focusing on finance for resilience and net zero transitions, the report looks at an additional example of Canada’s Green Municipal Fund (GMF), part of the Federation of Canadian Municipalities (FCM), which provides grants, loans and capacity building programs to support municipalities in initiatives that build greater resilience and take steps towards becoming net zero at a city-level.

Since its inception in 2000, the GMF has approved over 2,300 projects worth $1.6 billion CAD. By providing grants and loans to de-risk projects, it has brought in over $75 million CAD in private sector capital.

“This is not just about strengthening infrastructure,” said Lina Liakou, Managing Director of Resilient Cities Network. “By shaping resilience portfolios that attract private capital, we are making resilience practical, measurable and investable.”

The findings come just weeks ahead of COP30 in Belém, where global climate finance will be under negotiation, underscoring the urgency for cities to act.

The Portfolio Approach set out in the report defines six practices that make this possible: holistic planning, stakeholder coordination, capital allocation, data-driven strategies, project management, and transparency.

Together they provide the structure that investors, insurers, and communities need to mobilise resources at scale.

“Insurance must go beyond payouts,” said Brad Irick, Group CEO of Tokio Marine. “By partnering with cities from the start, we can help price and reduce risk, mobilise capital, and protect long-term economic competitiveness.”

With global climate finance negotiations intensifying, the report’s message is clear: shared risks require shared investment. Cities, financiers, and insurers must act together now to secure the resilience of communities and economies. The economic imperative for investing in resilience will be demonstrated through piloting the Portfolio Approach with cities worldwide.

“In order to meet the resilience challenge, cities need to plan and prepare projects over much longer time horizons.

The portfolio approach provides robustness and agility to city infrastructure development, and is attractive to investors, lenders and donors,” said Gareth Morgan, Executive Director of Future Planning and Resilience, City of Cape Town.

“Broward County’s portfolio-based approach to resilience planning reflects a process of co-development involving the public and private sectors. It was clear that while the business community was supportive of resilience planning in general, their ability to endorse a large-scale plan requiring sizable financing would hinge on the county’s ability to produce a plan that delivered on both flood risk and economic metrics”, said Jennifer Jurado, Chief Resilience Officer of Broward County, Florida.

“Today, the County’s Resilience plan is affectionately referred to as the required ‘blueprint’ needed to carry our community forward as we work as partners to build support for its implementation, across all levels of government, involving the broader field of private sector stakeholders, and throughout the community,”  she noted.

“From case studies, we draw practical lessons on how cities, companies, financiers and tech enablers deliver adaptation and resilience solutions that strengthen urban systems. Our goal is a pragmatic approach for moving from theory to action, built to attract and scale private sector capital,” said Sadiq Currimbhoy, Lead Author and Head of Sustainability, Vulpes Investment Management.

 

Newswire.