Developing Standardized Financial Risk Metrics for Climate-Resilient Investment in the Built Environment

The increasing frequency and severity of climate change and disaster events pose significant financial risks to the built environment, particularly in rapidly urbanizing regions like India. This study addresses the lack of standardized financial risk metrics by developing a Multi-Criteria Decision Analysis (MCDA) framework to assess climate and disaster risks for urban households, commercial buildings, and government institutions. The methodology integrates hazard exposure, structural vulnerability, adaptive capacity, and financial materiality into composite risk scores using secondary data. Results reveal distinct risk profiles: urban households face moderate-to-substantial risks due to seismic vulnerability and low insurance coverage; commercial buildings are most sensitive to climate-driven revenue losses; and government institutions are vulnerable to flooding and slow recovery times. The framework provides scalable, transparent metrics to guide climate-resilient investment, policy enforcement, and adaptation planning. Key recommendations include seismic retrofitting, insurance schemes, revenue diversification, and flood-proofing critical infrastructure. The study bridges technical hazard assessments and financial decision-making, offering a replicable approach for standardized risk evaluation in the built environment.