Materials for Adaptation to Climate Change in the Built Environment, 2024-2031

Severe Climate is Driving Transformational Growth Due to Escalating Risk Mitigation Needs

Climate change is an unavoidable force shaping today's world, regardless of political debates or resistance to scientific consensus. Its physical impacts, such as damage to infrastructure, disruption of supply chains, rising insurance costs, and increased financial risk, are visible daily.

While the effects of global warming will only intensify, most global construction materials companies have yet to fully engage with climate risk as a business opportunity, leaving room for smaller firms and start-ups to lead. Amidst global economic instability marked by trade tensions, ongoing conflicts (such as those in Ukraine and Israel), and shifts in geopolitical power, climate risk could emerge as a more central business and policy concern, especially as environmental, social, and governance initiatives face backlash.

This report builds a comprehensive set of opportunities across the construction materials ecosystem, highlighting innovation in materials and describing how existing products and solutions can be remarketed, used to gain new customers, and provide much-needed solutions to growing needs.

Research Scope

Content Present in Points

• Companies to Action
• Best Practices
• Frost Radar
• Growth Opportunities
• Transformation
• Ecosystem
• Growth Generator

The Impact of the Top 3 Strategic Imperatives on Materials for Climate Risk Mitigation in the Built Environment

Transformative Megatrends

Why

Climate change is a transformative factor in today's life, no matter how policies and politics deal with it.

Its impacts on the physical world are, unfortunately, visible every day somewhere around the world.

Damages to the built environment (residential, non-residential, infrastructure), the disruption of supply chains, impacts on insurance costs, higher financial risk, and rising costs of disaster recovery are just a few of the impacts that global warming is throwing at us.

Frost Perspective

Despite how some leaders might challenge the scientific consensus around climate change, its effects will be even more visible in the future.

Nevertheless, global construction materials companies have not determined to go all-in after climate risk as a business opportunity. For now, this is in the hands of smaller companies and start-ups.

The current trend against ESG and sustainability might leave place for climate risk to take the center stage, and this will lead to the need for implementing some of those much-needed adaptation actions.

Disruptive Technologies

Why

Disruptive technologies, ranging from improved climate models, AI-leveraged analysis, and digital simulations, to drone field monitoring and new materials, are poised to play their part in mitigating the physical impacts of climate change.

Frost Perspective

Nevertheless, technologies are not enough. A systemic approach including policies, market incentives, tight controls of environmental impacts, and community welfare must also be present in taking either by private or public action.

Construction task forces are dropping the US supplying materials for future-proofed construction, which will need to be aware of all.

Geopolitical Chaos

Why

By the time of this report's production, the world is going through a lot of economic turmoil due to the US's imposition of tariffs on most other countries, causing similar measures from other governments, and creating an extremely uncertain scenario for the future.

Russia, Ukraine, Israel and their neighbor countries are today involved in some kind of armed conflict. Its branches reach (but not exclusively) the US, Europe and China.

Europe is increasing its budget to strengthen its military capacity, preparing to face, or deter, a Russian attack. The expansionist goals of both China and the US are also well known.

Frost Perspective

Some analysts are describing a "pre-war" scenario in Europe, while the US is focused on reducing China's influence in the World, both in economic terms-globally-and military terms (in Taiwan). The US's move on Panama and Greenland adds instability to the region, with global geopolitical consequences.

Several countries are dropping the US currency for international trade operations, weakening the US's dominance.

All indicators point towards more instability for at least the next five years.

Growth Drivers

• Climate Change
• Insurance Industry
• End-consumer Demand

Growth Restraints

• Construction Materials Industry Maturity
• Regulation, Building Codes and Green Building Standards
• Innovation adoption in the construction sector has historically been sluggish. This also applies to new climatic hazards. The larger possibility to proactively lower climate risk across their clientele is still underutilized, even if major businesses have started to evaluate and modify their own operations to these risks.
• It's notable that start-ups and small businesses are reconsidering how infrastructure and buildings might be used as tools for resilience are making the most significant advances in climate-risk-oriented building materials, rather than the industry's established players. This discrepancy draws attention to a lost commercial opportunity: coordinating end-user value generation with climate adaptation.
• Resilience is becoming a fundamental need in design, as seen by the growing incorporation of climate adaptation into regulatory frameworks, building codes, and green building standards. It is anticipated that the demand will develop to handle performance in the face of severe weather and ongoing climatic stressors in addition to energy efficiency. The need for building materials that actively support the resilience of infrastructure and buildings will increase as these standards become more stringent.

Research Highlights

• Climate change is a global issue, but climate risk is a local one. Hazards, vulnerabilities and exposure are assessed and addressed locally, region by region, or asset by asset.
• Improving resilience through construction materials is just one of the possible measures that can be taken to adapt an asset. Urban planning, landscape design, architectural design, early warning systems, infrastructure redundancy, improved response resources, training, even measures at the end-user level, are some others. All of these should be implemented jointly.
• Building codes deal with local particularities of the areas that they manage, and they set the minimum standards that buildings must meet. Architects and engineers work under their guidance, and, in some cases, construction materials and solution providers work to fulfill their demands.
• However, the mere existence of building codes does not guarantee that assets will be effectively built following their criteria.
• Despite its long-term benefits, mandatory adoption of climate-ready materials is often resisted by real estate developers (due to their costs), and by local governments (because building with climate risk in mind often means restricting the use of the land). Nevertheless, there is a record of building codes reactively being updated after catastrophes (wildfires and floods for example), demanding specific materials and landscaping measures.
• Also, regarding the real estate market, reports from secondary sources state that, only in the US, by 2055, about 70,000 neighborhoods would be negatively impacted by climate risk in some way, resulting in $1.47 trillion in net property value losses as a result of insurance pressures and changing consumer demand*. This underscores the need for adaptation.
• Building specifications designed according to historical climate conditions are not sufficient anymore. New built buildings and pieces of infrastructure need to consider future climate in their particular region.