No city, business or human activity will ever be completely risk free. Climate change, natural disasters, energy blackouts and man-made events are adding extra pressure on cities, putting more than 540 billion dollars of global GDP at risk every year. That’s key finding of Lloyd’s City Risk Index, built in collaboration with Cambridge University, which measured the impact of 22 major threats on 279 cities’ projected economic output.
Tokyo, New York and Manila are the most vulnerable megalopolis in the world, while London is the only European City in the top 10 positions of this ranking. Man-made threats like conflicts, terrorism, cybercrime, market or financial crashes account for 59% of world GDP at risk, as their consequences could vanish about 320 billion dollars. Climate change and extreme weather events could impact for about 226 billion dollars, but this sum is expected to grow as hurricanes, floods, windstorms, earthquakes and volcanoes are becoming increasingly frequent and severe.
Every City has a different risk map, which government, citizens and companies should be aware of. If Tokyo is exposed to high seismic danger, nuclear attack risks might be finally downsized after recent easing of tensions between USA and North Korea. An earthquake could cause Los Angeles to lose at least 2,7 billion dollars of local GDP. London would be impacted more than others by market crashes or significant cybercrime offenses, but urban water resources are also threatened by possible floods or drought seasons. Hydrogeological instability is a relevant risk for most Italian regions, and financial default is also acknowledged among top dangers.
Building resilience is thus an urgent priority for cities and businesses. According to Lloyd’s, if every City in the index were to improve its defenses to the highest possible level, global GDP at risk would decrease by as much as 73 billion dollars. Investments at stake span from physical flood barriers to digital firewalls and enhanced cyber security, from improved law enforcement to comprehensive insurance, and more.
Threat and issue monitoring is also highlighted as a key measure to detect adverse events and possibly defuse emergencies before they turn serious. Software solutions such as Emergency Response Director by KRIU could be useful to support organizations in becoming more resilient and reacting to critical events that can jeopardize City services and business operations. Contact our team if want to learn more about it.