A new report by Verisk Maplecroft’s, the Climate Change Vulnerability Index (CCVI), which assesses the threat from climate change over the next 30 years has established that 84% of the top 100 cities by population are at ‘extreme risk’, with a further 14 in the ‘high risk’ category.
According to the data, rapid growth, rising temperatures and increasingly severe weather events brought on by climate change are putting companies and investments at risk.
Maplecroft further say that 95% of the 234 cities considered ‘extreme risk’ in the CCVI are in Africa and Asia, compounding fears that the world’s poorest countries are set to pay the highest price of climate change.
The Index by Verisk Maplecroft emphasises how urban climate impacts will have significant implications for major corporates operating on a global level with supply chains throughout the world. Already, there is growing evidence pointing to the fact that the world’s poorest countries will incur more liability in comparison to their richest counterparts by having to pay a higher price for the rising temperatures.
The major physical risks to investments cited include damage to infrastructure, property and assets caused by tropical cyclones or flooding, all of which are set to become more severe and frequent in the coming decades due to ongoing climate change. Drought, crop failure and instability brought on by climate change may also compound the risks by driving even larger numbers of people towards cities through cross-border and rural migration.
Richard Hewston, principal Climate Change and Environment Analyst at Verisk Maplecroft explained that “Businesses operating in megacities have to understand the physical risks in the short, medium and long- term,” he said. “They must work to build their resilience to climate shocks, not only to protect their assets and people, but also to satisfy investors that are increasingly factoring climate risk into their investment process.”
86 of the 100 fastest growing cities in the world are in Africa, of which as many as 79 are rated at ‘extreme risk’ in the Index. These include Kampala in Uganda, Dar-es-Salaam in Tanzania, Abuja and Lagos in Nigeria, Addis Ababa in Ethiopia, and Luanda in Angola, where populations are all set to continue surging over the coming decades.
The report estimates that the amount of GDP in African countries exposed to these ‘extreme risk’ in the Index will grow from $895bn this year to almost $1.4tr in 2023, which represents nearly half of the continent’s entire GDP.