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From Resilience to Returns
4 February 2020
The investment argument for a sustainable Cape Town
It is widely accepted that, today, the world’s cities are home to around 55% of the planets population. It’s the first time in the history of the world that more people live in cities than do in urban areas. It is also estimated, and generally agreed, that these highly populated cities account for more than 80% of global gross domestic product. They are also vital contributors to continued economic growth thanks to their generally very high levels of productivity and innovation.
Small wonder then, that when the United Nations developed its Sustainable Development Goals in 2015, one of these global development goals was dedicated entirely to ‘making cities and human settlements inclusive, safe, resilient and sustainable.’
Of course, while SDG 11 is a global imperative, its achievement will be almost entirely dependent on the development and implementation of local solutions. Put another way, each city in the world is ultimately responsible for securing its own sustainability, housing solutions, infrastructure, climate change mitigation, disaster protection and opportunity creation, all of which fall neatly under the umbrella of one word… Resilience.
The City of Cape Town has long recognised and embraced this responsibility. In fact, the local authority has been planning and working towards making Cape Town a highly resilient and sustainable city since some time before the SDGs were formally unveiled. Consequently, the city today finds itself positioned relatively well ahead of the global curve in terms of progress on its journey towards resilience and the achievement of the goals and objectives that underpin SDG 11.
A journey towards integrated resilience
The 100 Resilient Cities (100RC), an initiative pioneered by the Rockefeller Foundation, and in which Cape Town participates, defines urban resilience as ‘the capacity of individuals, communities, institutions, businesses, and systems within a city to survive, adapt, and grow, no matter what kinds of chronic stresses and acute shocks they experience.’
In the 2018/19 financial year, the City of Cape Town’s ongoing resilience focus evolved into a fully-fledged Resilience Strategy, which is essentially a 21st century roadmap that Cape Town will follow to strengthen its defences against sudden potential shocks ranging from storms and heat waves, to cyber-attacks, global financial crises and other unforeseen challenges. Cape Town is the first city in South Africa, and only the third in Africa to have such a resilience strategy, which is fully aligned with the SDGs and is intended to serve as a guide for all city stakeholders, including its households, communities, institutions and even investment partners, to build collective responses to the current and future social, environmental and economic challenges.
It outlines 75 key resilience-developing actions and priorities that range improving urban regeneration and developing a neighbourhood resilience assessment, to implementing adaptive management training for City officials and making better use of data analysis for decision-making that promotes resilience. A key component of Cape Town’s resilience strategy is also its focus on forging effective partnerships across government, business, community organisations, academia and households – all with the ultimate outcome of building the city’s collective resilience.
From shared resilience commitment to mutual investment returns
Importantly, the rationale for a shared commitment to the achievement of city resilience and SDG 11 extends far beyond social support or philanthropy. The investment case for city resilience is well established, both for those individuals who invest directly in achieving such resilience and those who invest in a city because of its resilience.
Leading UK-based think tank, Centre for Cities, which is dedicated to improving the economies of the UK’s largest cities and towns, has done extensive research into the rationale behind investing into city resilience, and the findings paint a compelling picture of potential long-term returns. The bottom line, of course, is that investors are only attracted to cities if they present opportunities to achieve returns on investment. And resilience is directly linked to such investment return potential.
The research done by Centre for Cities cites four main city characteristics as being the most significant for consideration by potential investors. These are:
- A strong local economy with demonstrable growth potential
- Excellent transport infrastructure and connections
- Leadership that is pro-growth and forward thinking
- A clear and committed focus on delivery to citizens
Even at a cursory level of consideration, it’s clear why any city’s achievement against these four key considerations could make or break it in the eyes of prospective investors. But a deeper look at each demonstrates how Cape Town’s resilience commitment adds to its investment appeal:
| The investment case | The Cape Town component |
| A strong and growing economy maximises opportunities for investment and the potential for sustainable returns. | A resilient economy offers protection against economic cycles and external fiscal shocks, effectively maximising the likelihood of smoother investment returns irrespective of broader economic conditions.
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| A well connected city, with reliable and divers transport options, means fewer labour disruptions, higher levels of productivity, and smoother supply chains.
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A well-established, funded, and ongoing transport rollout strategy is building capacity, should reduce congestion over time, and is connecting skills with opportunities. |
| When political and executive leadership agree on the growth imperative and prioritise the attraction and retention of investors, the city has the best chance of success, and investors have the best chance of sustained returns.
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The approval of Cape Town’s Resilience Strategy is indicative of the agreement by all leaders to the non-negotiable requirement to build an economically, socially and environmentally resilient city. More than that, this shared pro-resilience and pro-investment attitude translates to supportive leadership and investment friendly policies.
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| When cities combine pro-investment attitude with a partnership philosophy, a win-win outcome is created for all stakeholders, including investors. | When, as is the case in Cape Town, that partnership approach is founded on the understanding that investment ultimately equals benefits for citizens and the steady achievement of resilience outcomes for all, smoother, easier, less restrictive investment is the natural result. |
Looking forward to 2030
It is estimated that by 2030, the year in which the SDGs are supposed to have been achieved, the proportion of people living in the world’s cities will have risen to 60% of the total global population. For most cities, it’s an understandably frightening thought. But for those urban centres that, like Cape Town, have established solid resilience foundations, it is an exciting prospect. That’s because growing city populations, equipped with relevant skills, and residing in a safe, inclusive, well-serviced environment, with a positive culture, have infinite potential for productivity, innovation and economic contribution.
For Cape Town, that means the years of hard work and commitment into building resilience and sustainability into the social, government and infrastructural fabric will almost certainly pay off in the form of a city that is a formidable African and global hub of ideas, commerce, education, culture, science, social development and high-performance productivity. And those who had the foresight to invest money, resources, skills or effort into the creation of this leading global city will most definitely be reaping the rewards, financial or other.
Download the Cape Town Resilience Strategy here.
