New Urban Agenda Implementation: Mobilising the “resilience dividend”

by | Feb 7, 2018 | News

This blog post describes our Programme’s Investment workstream and it is part of a series of four published by our team as we present our work at the World Urban Forum (WUF9). The other pieces cover the Intelligence, Implementation and Integration workstreams.

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The New Urban Agenda calls for a systems-based approach. It is ultimately focused on improving health outcomes at both local and global scale; human, ecological and economic health. So how can we mobilise the “resilience dividend”? How can we reduce the perceived risk for investors around complexity in understanding investable projects? Or concerns about capital market and regulatory uncertainty and a lack of proven outcomes from adopting a systems-based approach to rapidly shift the trillions required to achieve these aims? How about a science and risk-informed global programme that empowers local people to create practical demonstrations in 200 city regions worldwide?

The intergovernmental process has delivered a clear policy signal through to 2030 and beyond. The scientific community is unequivocal about the need for urgent, planetary scale action. The world’s largest investors, from Black Rock1 to Vanguard2, are openly calling for businesses and investors to find their purpose and become a force for good. The expert groups3 have made their recommendations for financial system actors to change their stripes; listen to people’s sustainability preferences; act for the long term to reduce the chances of another financial crisis; and connect sustainable finance with the specific needs of places.

The momentum is growing, from divestments4 to Green Bonds5 to embracing enhanced disclosure of climate risk6 and structural changes in financial supervisory mandates. The opportunity to shift to a sustainable finance paradigm is clearly now on the investor agenda.

And for investors and governments, a systems-based approach can harness this momentum with the potential to achieve a reduction in required infrastructure investment through to 2030 from around 8% of GDP per year to 4.8% with improved city-region systems health outcomes. This saving of up to 40%7 is now within our reach. It can be achieved by consistently applying a systems-based approach at city-region scale across the world, to mobilise the resilience dividend.

The ambitious five-year Resilience Brokers Programme is aimed to develop and demonstrate innovative tools and build the capacity to enable and accelerate the journey towards climate-compatible, risk-resilient and equitable futures, in 200 city regions worldwide.

The Programme will help to establish aggregated project financing vehicles, Urban Development Investment Funds (UDIFs)8, in city regions, using the consistent and comparable risk-informed evidence base provided by resilience.io and collaborative project design mechanisms. UDIFs will enable the redirection of trillions in global capital flows into aggregations of resilient, risk-reduced initiatives to improve city-region development.  This will unleash blended finance opportunities to mobilise insurance and investor groups, including the faith-consistent investors9.

The introduction of sustainable development paths with this scale of capital mobilisation–working with the (re-)insurance industry to effectively integrate systemic risks into mainstream finance activities and deploy insurance into under-protected vulnerable city regions–will support the implementation of the New Urban Agenda and the achievement of the Global Goals. The Resilience Brokers are at WUF9 and we look forward to introducing interested city-region champions and potential new partners to the Programme.

As the EU High-Level Expert Group on Sustainable Finance recently stated:

“Sustainable finance means a commitment to the longer term, as well as patience and trust in the value of investments that need time for their value to materialise”.

The Resilience Brokers Programme has the potential to deliver trillions in value, but to be implemented at the necessary scale to achieve transformative action requires patience and trust. We know the world is ready. We are Resilience Brokers and we welcome you on the journey to mobilise the resilience dividend and build a better future for generations to come.

[1] https://www.blackrock.com/corporate/en-ch/investor-relations/larry-fink-ceo-letter

[2] https://3blmedia.com/News/Vanguard-Fund-Giants-Urge-CEOs-Be-force-Good

[3] https://www.transparencytaskforce.org/teams-of-volunteers/financial-stability-team/ and https://ec.europa.eu/info/sites/info/files/180131-sustainable-finance-final-report_en.pdf

[4] https://www.theguardian.com/environment/2017/oct/03/catholic-church-to-make-record-divestment-from-fossil-fuels

[5] https://www.reuters.com/article/greenbonds-issuance/global-green-bond-issuance-hit-record-155-5-billion-in-2017-data-idUSL8N1P5335

[6] https://www.fsb-tcfd.org/

[7] https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/infrastructure-productivity

[8] https://ecosequestrust.org/financeforSDGs.pdf

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Read other blogs from our team for the World Urban Forum (WUF9) on Intelligence, Implementation and Integration.