This story has been updated to reflect the correct figure for the cities’ total investment needs, at US$62.7 billion.

Investing in cities’ climate resilience makes good business sense, says a new report that notes a growing funding gap between available funding and what cities need.

“Resilient cities create stable operating environments that attract investment,” writes CDP, formerly known as the Carbon Disclosure Project, in its latest U.S. Infrastructure Opportunities Snapshot.

“When cities build resilient infrastructure, they provide operational stability that companies increasingly prioritize in location decisions. Cities that proactively invest in climate resilience offer more predictable conditions, positioning themselves as preferred destinations for companies integrating climate risk into strategic planning.”

Cities are facing increasing risk of expensive damages with the number of climate disasters each year on the rise, like from the wildfires that have torn through communities in California, and the flooding of New York City’s subway system. But as U.S. government support for climate resilience and disaster response dries up under sustained attack from the Trump administration, the financial burden of adapting and responding to climate disasters is shifting to city and state governments and private entities.

CDP reports that climate disasters cost the U.S. economy US$6.6 trillion in damages from 2013 to 2024, including nearly $1 trillion in the last year alone. But those disasters carry costs beyond immediate physical damages by disrupting delivery of public services—”they close factories, halt supply chains, and shut down transit systems,” CDP writes.

Though city governments are well aware of these risks, there remains a wide gap between what they need to build resilience and what is available. CDP reports that while overall investment needs across 124 U.S. cities totalled $62.7 billion for 484 different projects in 2024, only about $22 billion was available—leaving a difference of over $40 billion to meet cities’ needs.

The investment gap spans many different sectors. Water management has the highest reported investment need, at $11.6 billion, while cities asked for $9.8 billion to address risks to transport. But the greatest number of projects seeking investment was in the building and energy efficiency sector, which accounted for 125 of the 484 projects.

Failing to act now could lead to even greater costs down the line. According to CDP, the billions of dollars of investment that cities now require could avoid trillions of dollars’ worth of added costs in the long run. Moreover, those  “proactive measures serve multiple benefits, uplifting low-income vulnerable populations, creating healthier communities, and generating employment opportunities.”

With federal support waning, there is now a greater need for private-public partnerships, which were used as a funding mechanism for only 65 of the climate projects reported in 2024.

CDP says cities can drive greater investment by accurately disclosing and reporting on pressing climate risks. The report notes a “multiplier effect” of climate disclosure, with cities that clearly identify benefits reporting four times as many adaptation actions compared to cities that did not report outcomes.

“The four-fold difference suggests that adaptation benefits, when measured and communicated, are powerful motivators for sustained climate action,” writes CDP, “possibly because these actions are immediately visible and directly experienced by community members.”