As climate extremes intensify and infrastructure systems around the world face unprecedented stress, the global community is grappling with a stark reality that resilience is no longer optional rather an urgent imperative. International frameworks such as the 2030 Sustainable Development Agenda, as well as the Sendai Framework for Disaster Risk Reduction, both acknowledge the urgency of improving the resiliency of global infrastructure. Despite 2025 marking the 10th Anniversary of their adoption, progress with respect to the targets has been modest. According to the United Nations Sustainable Development Goals 2024 Report, only 17 percent of the targets appear to be on track, with poor infrastructure resilience, financing gaps, and governance challenges being identified as major barriers. Similarly, the midterm review of the Sendai Framework highlights that there has been slow progress with respect to Target D, which aims to “significantly cut disaster-related losses to critical infrastructure and interruptions to essential services by 2030”. In particular, parties have reported that between 2015 and 2023, an average of 92,199 critical infrastructure assets have been damaged annually, with more than 1.6 million basic service facilities being disrupted.
The recent COP30 deliberations witnessed the release of CDRI’s flagship report on Global Infrastructure Resilience, which underscores the importance of three types of capacities, namely, to absorb shock, to respond and to recover from disasters. It highlights that indirect losses resulting from service disruptions of electricity, water supply, etc, are 7.4 times greater than direct damages to infrastructure. The report introduced the concept of resilience dividend, i.e., the range of benefits resulting from investment in infrastructure resilience, including but not limited to avoided asset losses, reduced disruption in services, improved quality and reliability of public services and so on. In fact, over the life span of infrastructure assets, the resilience dividend has generally outweighed the quantum of additional investment required. According to the results of an extensive survey of businesses conducted by CDRI, spread across 60 countries, it was found that 77 percent feel that government policies for reliance are either absent or are inadequately enforced. Additionally, while 87 percent of the surveyed firms have insurance, about 42 percent have only partial coverage for asset and revenue losses.
The fact that climate-related risks have both direct (physical damage to assets such as plants, equipment, etc.) and indirect (supply chain disruptions, hindrances to logistics, etc.) impacts on industries is well documented. Given their central role as drivers of economic growth, ensuring the resilience of the manufacturing sector to withstand climate shocks is critical. While one key aspect is to assess the risk and exposure, the other is to identify and implement strategies to fortify against potential climate-induced damage. Unfortunately, industrial resiliency planning in India remains at a nascent stage. A recent ICRIER study involving loss and damage estimation for the states of Odisha (cyclone) and Assam (flood) found anecdotal evidence that supports this claim. For instance, the aftermath of Cyclone Fani in Odisha, resulted in the industrial plants suffering extensive damage to buildings, machinery, and inventories, with losses reaching 10-25 percent of productive capital and, in some cases, going as high as 75 percent. However, industry respondents covered as part of a parallel ground truthing survey, claimed that insurance coverage was minimal, forcing them to fall back on savings or borrowing. Businesses also faced prolonged operational disruptions due to power outages, Information and Communication Technology (ICT) network failures, damaged infrastructure, and delays in raw material supply, with recovery periods ranging from a few weeks to several months. In Assam, even units not directly impacted by floods suffered monsoon-related moisture damage to raw materials and inventories, especially in water-sensitive sectors such as cement, coke, and perishable goods. Thus, even though floods and cyclones are annual occurrences for these states, the measures adopted by them to deal with the same are largely rudimentary. For instance, pre-season cleaning of stormwater drains, installing heavy-duty gates to prevent water from entering factory premises, etc. Persistent issues such as partial insurance, delayed claims, inadequate asset coverage, and repeated seasonal disruptions highlight that industrial resilience remains largely reactive and unplanned, underscoring the need for a more structured approach. But if repeated losses can’t move the needle on preparedness, it begs the question, what will?
One possible way around this is for planning to move from a voluntary practice to a mandated requirement, ensuring that firms adhere to some pre-identified standards. Such a measure would not only help assess current resilience levels but would also serve as a basis for prioritising funding flows, incentivising risk-reducing investments, and monitoring progress over time. This framework could be operationalised through a mandatory disclosure mechanism. A useful precedent is the Environment, Social and Governance (ESG) reporting requirement introduced by the Securities and Exchange Board of India (SEBI), which now mandates the top 1,000 listed companies by market capitalisation to report under the Business Responsibility and Sustainability Reporting (BRSR) framework. It encourages firms to report on environmental risks and/or opportunities they face and the various mitigation or adaptation measures they have adopted to manage the same. Parallely, the Reserve Bank of India (RBI) is also in the process of formalising the disclosure framework on climate-related financial risks that aims to improve transparency and strengthen the sectors’ ability to identify, assess, and manage risks associated with climate change. Taken together, the evolving reporting architecture reflects an institutional shift towards embedding climate impacts into planning and decision-making.
In conclusion, having established the need for financial resources for resiliency building and having identified avenues of potential beneficiaries of such funds, the next obvious step is to ascertain how these resources should be allocated. For meaningful impact, this would require breaking away from reactionary ad-hoc interventions towards a systematic evidence-based approach that prioritises measures with demonstrable resilience gains. As the country’s regulatory landscape moves towards greater transparency with the forthcoming RBI climate-risk disclosures, there is merit in riding the momentum to develop a resiliency framework for industries. One that is bolstered by sectoral benchmarks and resilience assessments to ensure that climate-induced shocks do not derail long-term growth trajectories.
(Views expressed are authors’ own and don’t reflect those of ICRIER)
