Climate change remains a risk for global construction

Climate change has become an increasingly determining factor for the global construction industry, to the point that more than 60% of contractors warn that it will directly impact their operating costs, according to Marsh’s 2025 Global Construction Sector Risk Report.

“A particular concern in the (construction) sector is the entire issue of climate change and the issue of building infrastructure that is not only resilient to the climate change occurring globally, but also flexible to the climatic conditions that are occurring in some areas,” said Jean Paul Hart, leader of Marsh’s construction and infrastructure practice in Latin America, during an interview with EL VOCERO.

According to Marsh’s 2025 Global Construction Sector Risk Report, while not the top risk, 4.8% of respondents identified environmental and climate change as one of the top 10 risks in the sector.

This report, conducted in collaboration with GlobalData in December 2024, surveyed more than 230 contractors worldwide, including construction managers, engineers, general contractors, and subcontractors.

“For example, in southern Brazil, in the Porto Alegre area, we in the insurance sector traditionally didn’t have catastrophic exposure because it was an area with high levels of simplicity. Statistics show that it was actually an excellent location for construction. However, for approximately seven years, the amount of rainfall recorded annually in that area has increased by almost 30% to 40%,” he indicated.

The risk engineer added that this phenomenon is repeated in other regions. In North Africa, for example, sandstorms have intensified, while in Central Europe, rainfall has increased and flooding is more frequent.

In the Caribbean, the incidence of hurricanes has become more pronounced, with increasingly significant losses for the sector.

According to Hart, constant changes are leading people to redefine risk management strategies, even preparing for what has never happened before.

Hurricane Toll on the Island

Hurricane season began on June 1 and ends on November 30.

In Puerto Rico, Hurricanes Irma and Maria in 2017 caused damages exceeding $90 billion, according to the National Hurricane Center (NHC).

Hurricane Ernesto, in 2024, caused approximately $520 million in damage, primarily due to torrential rains and strong winds affecting Puerto Rico, the Virgin Islands, and Bermuda, according to an AON report cited by the NHC in a report.

Operational Impact

Sixty-two percent of respondents to the Marsh study considered that this risk (climate change) will have a significant or somewhat significant impact on the cost of their operations. Meanwhile, 45% indicated the same regarding the regulatory burden and 44% regarding physical damage.

Despite growing awareness of climate change risks, the implementation of strategies to manage them remains limited, according to respondents. Among the most common measures are physical climate risk assessments in the supply chain (32%), general physical climate risk assessments (32%), and the incorporation of carbon-neutral or net-zero commitments into project designs and plans (29%).

This is just one of the five risks Hart will discuss during his participation in the Puerto Rico Constructors Association (ACPR) Annual Convention on September 10, 2025, at the Puerto Rico Convention Center.

“The construction sector is a risky sector. People invest in this sector for high returns, precisely because it has a high risk factor. However, there are things we can control with existing tools and solutions to design the management of these risks,” Hart pointed out.