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New York City

Urban Infrastructure: a $3.7 Trillion Annual Business Opportunity

new-york-citySustainable urban infrastructure, such as building water systems and housing, represents a $3.7 trillion a year business opportunity for companies with an annual investment of $2.5 trillion by 2030, according to research commissioned by the Business and Sustainable Development Commission.

Valuing the SDG Prize in Cities breaks down these business opportunities across 16 areas, including affordable housing, energy efficiency in buildings, improved mobility systems, building resilient cities, smart metering, modular and timber buildings, water infrastructure and cultural tourism. The report puts the lowest value at $20 billion per year for durable and modular buildings while the highest goes up to $1.1 trillion per year for affordable housing.

The report looks at how urban-focused businesses can experience growth by pursuing sustainable and inclusive business models aligned with the UN’s Sustainable Development Goals (SDGs). Launched in 2015, the SDGs are 17 targets for ending poverty and hunger and tackling challenges such as climate change by 2030.

Cities directly relate to Goal 6 (clean water and sanitation), Goal 7 (affordable and clean energy), Goal 8 (decent work and economic growth), Goal 9 (industry, innovation and infrastructure), Goal 11 (sustainable cities and communities), Goal 12 (responsible consumption and production), and Goal 13 (climate action).

The report also estimates these business opportunities could create 170 million jobs by 2030. Eighty-five percent of these could be in developing counties, including 32 million in Africa and around 96 million in Asia.

“The world’s urban population is forecast to grow by almost 1.4 million people each week for the next two decades,” said Lord Mark Malloch-Brown, chair of the Business and Sustainable Development Commission. “It is therefore critical that business and government work to strengthen the urban infrastructure and services needed to meet the demands of growing communities. This report shows there are clear economic incentives for companies working in urban spaces to seize upon sustainability as a compelling growth opportunity.”

The annual investments needed to open these market opportunities by 2030 is about $2.5 trillion a year — a huge jump from the current annual global expenditure on major infrastructure of about $2.2 trillion. This means meeting the capital demands will be a major challenge. To open these opportunities, companies will need to operationalize sustainability across their supply chains and internalize social and environmental costs, the report says.

Valuing the SDG Prize in Cities follows an earlier Business and Sustainable Development Commission report released in October that found achieving the SDGs could unlock new business opportunities worth about $2.3 trillion annually in the food and agriculture sector.

Some companies are already integrating the SDGs into their business practices. In an effort to help companies report and communicate their contributions to the SDGs, the Global Reporting Initiative and the UN Global Compact earlier this year renewed their sustainability reporting collaboration.

“Together we can help companies measure and report on their efforts around the new Sustainable Development Goals, in ways that both show impact and are aligned with emerging best reporting practices,” explained Lise Kingo, executive director of the UN Global Compact.

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