Our industry is engaged in an important dialogue to improve the efficiency and resilience of real assets through transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position.
Climate risk mapping and adaptation strategies have emerged as vital instruments for safeguarding urban assets, ensuring business resilience, and enhancing investment appeal in the era of climate crisis.
In the face of the intensification and increased frequency of extreme weather events, climate resilience has established itself as a central aspect of the planning, execution, and operation of urban infrastructure. The capacity to anticipate, withstand, and recover from impacts such as flooding, droughts, and heatwaves has become essential for protecting lives, reducing economic losses, and ensuring the continuity of critical services.
Furthermore, climate resilience is now considered an indicator of quality and efficiency in urban asset management. Projects in transportation, energy, telecommunications, and sanitation, often granted to the private sector through long-term concessions, must incorporate climate risk analyses and adaptation plans. This practice strengthens investor and stakeholder confidence and aligns with ESG (Environmental, Social, and Governance) standards.
Why is this issue so urgent?
Climate change directly impacts the operation and sustainability of urban infrastructure.
According to the 2023 IPCC Synthesis Report, between 3.3 and 3.6 billion people live in areas at high risk for climate disasters. The panel warns that urban infrastructure is among the sectors most vulnerable to climate change and that, without adaptation measures, maintenance and reconstruction costs could reach billions of dollars.
The 2026 Global Risks Report by the World Economic Forum reinforces this concern by identifying environmental disasters as the third largest immediate risk, trailing only armed conflicts and economic disputes. This ranking demonstrates that climate risk now occupies a central place in the global governance and security agenda, demanding coordinated responses from governments, corporations, and civil society.
Climate risks: Impacts and mitigation
Climate risks represent the adverse effects of climate change on the environment, the economy, and society. They cover both the direct impacts of extreme weather, classified as physical risks, and the indirect consequences of shifting toward a low-carbon economy, known as transition risks.
Understanding these risks is essential for guiding adaptation policies, setting investment priorities, and establishing financing mechanisms that ensure long-term resilience.
Urban infrastructure, such as highways, power grids, and water supply systems, is among the assets most exposed to physical risks. These threats can be acute, including flash floods, flooding, heatwaves and cold snaps, storms, and wildfires; or chronic, stemming from gradual processes like rising sea levels, desertification, and shifting rainfall patterns.
In all cases, these events can lead to significant financial consequences:
Heavy rainfall and flooding—These damage roads, bridges, and drainage systems, while also disrupting public transport and driving up reconstruction costs. According to data from the Institute for Climate and Society, the region encompassing Latin America and the Caribbean experienced 548 floods between 2020 and 2022. On 12 of those occasions, damages exceeded R$ 1 billion.
Heatwaves—These overload power grids, accelerate pavement degradation, and strain healthcare systems. Studies by the OECD (Organisation for Economic Co-operation and Development) estimate that, under average global warming scenarios, road maintenance costs could increase by up to 30%, depending on the region and the type of highway.
Prolonged droughts—These reduce water availability, compromise urban supply, and necessitate investments in water reuse and reservoirs.
Storms and high winds—These cause damage to power and telecommunications networks, in addition to posing risks to public mobility and safety.
These impacts are not limited to physical damage. They exacerbate social vulnerabilities and can drive critical services to the point of collapse, resulting in economic losses in the billions. Consequently, managers and concessionaires are increasingly incorporating climate risks into contracts and operations by adopting adaptation measures.
An elementary step in this journey is climate risk mapping. After all, it is only by understanding these threats that one can effectively mitigate or prevent them.
Once risks have been identified, there are multiple ways to address them, ranging from designing emergency plans and creating contingency reserve funds to developing monitoring and early warning systems, among others.
Climate risk mapping: An approach scalable to maturity levels
Ideally, climate risk analysis should be performed using projections from advanced software and tools capable of complex modeling. Such studies can be conducted considering both moderate and pessimistic global warming scenarios, with projections targeted for 2030, 2050, and 2100.
However, not all companies possess the level of maturity or the financial resources to invest in robust analyses. In this context, simpler alternatives based on qualitative and historical data can serve as a starting point for identifying vulnerabilities.
While this process may not offer the same rigor as computational modeling, it allows companies to move forward with their adaptation plans while building a solid foundation for more advanced analyses in the future.
CTE specializes in climate risk analysis, covering both physical risks (with or without the support of climate projection software) and transition risks. Our methodology is always tailored to each client’s specific business, focusing on the most relevant risks. Once these risks are identified, we design a Climate Adaptation Plan that outlines actions across the short, medium, and long term. This plan is then supported by continuous monitoring and periodic reviews of the risk assessments.
Resilience as a strategy for the future
Climate resilience represents more than just a defense against disasters; it is an opportunity for transformation. Incorporating risk mapping and adaptation plans ensures operational continuity, protects lives, and strengthens the transition toward a low-carbon economy. Investing in climate resilience is an investment in the future of our cities—a future capable of safeguarding lives, reducing inequalities, and ensuring prosperity amidst climate uncertainties.
This article was written by Cristina Umetsu, GRESB AP, ESG and sustainability consultant at CTE. Learn more about CTE here.
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