Draft, not yet released. In stewardship review. Not indexed until the first approved release.

Systems in depth

One section per system: its state at evidence close, its exposures and what the operational series will watch.

8 min read0 figures5 tables19 notesNR-STRATEGIC-INVESTMENT-GLOBAL-2026-BASELINE

Contents
  1. ·Edition home
  2. ·Executive summary
  3. 1Money meets risk
  4. 2Key findings
  5. 3Systems and sectors at baseline
  6. 4Risks and capability
  7. 5A loss year that meets tight public budgets
  8. 6Readings from the other desks
  9. 7The 2027 agenda
  10. 8Systems in depth
    1. 8.1 Common causes
    2. 8.2 Domino effects
    3. 8.3 Inter-systemic feedbacks
    4. 8.4 Shared vulnerabilities
    5. 8.5 Thresholds and tipping
  11. AMethodology
  12. BData appendix
  13. CReferences and record
  14. ·Complete edition, for print

8.1Common causes

One cause can strike many budgets at once: a hazard, an energy shock, a rate move. The shared cause matters more than the line item.

224USD billion

overall natural disaster losses, 20253

92%

of overall losses from weather events, 20253

3.4USD trillion

global energy investment, 2026 estimate1

Table 8.1Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Natural hazardsstorms, floods and wildfire drive large annual losses34Reported
Energy securitysecurity concerns shape investment priorities in 20261Reported
Ageing assetsa USD 3.6 trillion ten-year gap in one national report card2Reported
Disaster cost studiesfull-scope disaster cost estimates exist and were not read here23Inferred

Pathways in this mechanism

  • CLI → INF hazards
  • ENE → FIN energy security
  • INF → FIN ageing assets

Evidence to bind in 2027

  • common cause tagging of budget lines
  • frequency of concurrent causes

Related editions

  • GLB Global Systems
  • SR-02 Critical Infrastructure and Lifeline Systems
  • SR-05 Sovereign, Fiscal and Financial Resilience
  • SR-06 Insurance, Protection Gaps and Insurability
  • GS-05 Finance and Economy
  • GS-08 Disaster and Resilience

8.2Domino effects

A shortfall in one flow removes an input from the next. Uninsured losses reach budgets, and budgets reach upkeep and adaptation.

≈48%

of overall losses insured, 2025 (method 1)3

80 to 90%

of losses typically uninsured in emerging economies4

27contributors

pledging to the loss and damage fund8

Table 8.2Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Loss to budgetuninsured losses fall on households and public budgets4Reported
Budget to upkeeprepair claims compete with planned upkeep2Inferred
Pledge to paymentabout half of fund pledges had been received8Reported
Adaptation to assetsdelayed adaptation leaves assets exposed67Inferred

Pathways in this mechanism

  • CLI → INF → FIN
  • FIN → DEV
  • DEV → INF

Evidence to bind in 2027

  • timing of budget shifts after loss years
  • upkeep spending data

Related editions

  • GLB Global Systems
  • SR-02 Critical Infrastructure and Lifeline Systems
  • SR-05 Sovereign, Fiscal and Financial Resilience
  • SR-06 Insurance, Protection Gaps and Insurability
  • GS-05 Finance and Economy
  • GS-08 Disaster and Resilience

8.3Inter-systemic feedbacks

Investment also depends on what it protects. Losses reprice cover, cover shapes budgets, and budgets shape the next loss.

25.6USD billion

cat bonds issued in 20255

61.3USD billion

cat bonds outstanding at end 20255

49%

of overall losses insured in 2025, a record share4

Table 8.3Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Loss to pricelarge loss years reprice cover35Inferred
Risk transfercat bond market grew to a record size5Reported
Prearranged financeshared funds link payouts to shocks27Reported
Fiscal feedbackclimate risk raises federal fiscal exposure12Reported

Pathways in this mechanism

  • CLI → FIN
  • FIN → FIN risk transfer
  • FIN → INF

Evidence to bind in 2027

  • public cover data
  • payout speed

Related editions

  • GLB Global Systems
  • SR-02 Critical Infrastructure and Lifeline Systems
  • SR-05 Sovereign, Fiscal and Financial Resilience
  • SR-06 Insurance, Protection Gaps and Insurability
  • GS-05 Finance and Economy
  • GS-08 Disaster and Resilience

8.4Shared vulnerabilities

Different portfolios share the same weak points: deferred upkeep, debt-heavy adaptation finance, slow recovery money and thin data.

65USD billion

adaptation finance tracked, 20236

196USD billion

international climate finance to emerging and developing economies, 20236

3.6USD trillion

US ten-year investment gap2

Table 8.4Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Deferred upkeepenergy D+ and dams D+ in the US report card2Reported
Debt-heavy flowsdebt makes up much of public adaptation finance35Inferred
Thin dataportfolios are not published on a common basis161915Reported
Governancefund governance and review cycles differ by country1740Reported

Pathways in this mechanism

  • INF → FIN deferred upkeep
  • FIN → DEV debt-heavy flows
  • DAT → FIN thin data

Evidence to bind in 2027

  • debt share of adaptation finance from the primary report
  • upkeep share by country

Related editions

  • GLB Global Systems
  • SR-02 Critical Infrastructure and Lifeline Systems
  • SR-05 Sovereign, Fiscal and Financial Resilience
  • SR-06 Insurance, Protection Gaps and Insurability
  • GS-05 Finance and Economy
  • GS-08 Disaster and Resilience

8.5Thresholds and tipping

A system can absorb stress until a threshold is crossed. Fiscal space, payment speed and cover availability are such thresholds for resilience investment.

≈50%

of loss and damage fund pledges received (method 2)8

10.3SDR billion

IMF resilience commitments, Feb 20269

300USD billion a year

2035 goal for all climate action7

Table 8.5Evidence at baseline
InstanceMechanism in actionEvidenceStatus
Payment speedabout half of pledges received at September 20258Reported
LiquidityIMF resilience facility has 27 arrangements and spare capacity910Reported
Finance goalsgoals set for 2035 exceed current flows67Reported
Tipping in budgetsrepeated loss years can crowd out upkeep23Inferred

Pathways in this mechanism

  • FIN → FIN payment thresholds
  • FIN → DEV finance goals
  • CLI → FIN repeated losses

Evidence to bind in 2027

  • fiscal space thresholds by country
  • cover availability thresholds

Related editions

  • GLB Global Systems
  • SR-02 Critical Infrastructure and Lifeline Systems
  • SR-05 Sovereign, Fiscal and Financial Resilience
  • SR-06 Insurance, Protection Gaps and Insurability
  • GS-05 Finance and Economy
  • GS-08 Disaster and Resilience

Notes

Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references

  1. 3Munich Re (ed.), Natural disaster figures for 2025 (media information, 2026; overall losses about USD 224 billion; insured losses about USD 108 billion; weather events 92% of overall losses; Los Angeles wildfires about USD 53 billion overall). Munich Re, Munich. Observation year 2025. Accessed 2026-11-03.back
  2. 1IEA (ed.), World Energy Investment 2026, launch presentation (11 pages, Paris, 28 May 2026; global energy investment USD 3.4 trillion in 2026 estimate against USD 2.6 trillion in 2015; electricity supply and infrastructure USD 1.6 trillion). International Energy Agency, Paris. Observation year 2026. Accessed 2026-11-03.back
  3. 4Artemis (ed.), report on the Swiss Re Institute sigma 1/2026 natural catastrophe figures for 2025 (insured losses USD 107 billion; overall losses USD 220 billion; about 49% insured; 92% of insured losses from secondary perils; 80 to 90% of losses typically uninsured in emerging economies). Read in this trade report, not in the sigma itself. Artemis, Bermuda. Observation year 2025. Accessed 2026-11-03.back
  4. 2ASCE (ed.), 2025 Report Card for America’s Infrastructure (overall grade C; ten-year investment gap USD 3.6 trillion; energy D+, drinking water C−, dams D+). American Society of Civil Engineers, Reston. Observation year 2025. Accessed 2026-11-03.back
  5. 23UNVERIFIED, not opened: UNDRR (ed.), Global Assessment Report on Disaster Risk Reduction 2025: Resilience Pays, taken from search-result summaries; the report pages returned access errors; no figure used in the findings. United Nations Office for Disaster Risk Reduction, Geneva. Observation year 2025. Accessed 2026-11-03.back
  6. 8UNFCCC (ed.), Report of the Board of the Fund for responding to Loss and Damage, addendum FCCC/CP/2025/10/Add.1, 10 November 2025 (pledges USD 790.24 million and amount received USD 397.74 million at 23 September 2025; 27 contributors). United Nations Framework Convention on Climate Change, Bonn. Observation year 2025. Accessed 2026-11-03.back
  7. 6Climate Policy Initiative (ed.), Global Landscape of Climate Finance 2025 (publication page, 23 June 2025; global climate finance USD 1.9 trillion in 2023; adaptation finance USD 65 billion, likely an underestimate; international flows to emerging and developing economies USD 196 billion, 78% public). Climate Policy Initiative, London. Observation year 2023. Accessed 2026-11-03.back
  8. 7UNFCCC (ed.), New collective quantified goal on climate finance, decision text FCCC/PA/CMA/2024/L.22, 24 November 2024 (at least USD 300 billion a year by 2035; call for USD 1.3 trillion a year from all sources; adaptation finance needs USD 215 to 387 billion a year to 2030). United Nations Framework Convention on Climate Change, Bonn. Observation year 2024. Accessed 2026-11-03.back
  9. 5Artemis (ed.), Catastrophe bond market records that were broken in 2025 (issuance about USD 25.6 billion; outstanding market just over USD 61.3 billion; 122 new 144A and private deals). Artemis, Bermuda. Observation year 2025. Accessed 2026-11-03.back
  10. 27UNVERIFIED, not opened: Global Shield against Climate Risks, funding and payout reports, taken from search-result summaries; no figure used in the copy. Global Shield secretariat. Observation year 2025. Accessed 2026-11-03.back
  11. 12GAO (ed.), High-Risk List 2025 (38 areas; includes limiting the federal fiscal exposure by better managing climate change risks). US Government Accountability Office, Washington. Observation year 2025. Accessed 2026-11-03.back
  12. 35UNVERIFIED, not opened: UNEP (ed.), Adaptation Gap Report 2025: Running on Empty, taken from search-result summaries (needs USD 310 to 365 billion a year by 2035; international public adaptation finance USD 26 billion in 2023; 59% as debt); the report pages returned access errors. United Nations Environment Programme, Nairobi. Observation year 2025. Accessed 2026-11-03.back
  13. 16Tribune India (ed.), Japan approves 20 trillion yen plan for disaster resilient infrastructure (press agency report of 7 June 2025; more than 20 trillion yen over fiscal 2026 to 2030). Tribune India, Chandigarh. Observation year 2025. Accessed 2026-11-03.back
  14. 19NSW Government (ed.), Disaster Ready Fund (page on the Commonwealth programme; AUD 1 billion nationally over five years from 1 July 2023 to 30 June 2028). New South Wales Government, Sydney. Observation year 2023. Accessed 2026-11-03.back
  15. 15Noerr (ed.), Bundestag approves exemption from the debt brake for defence spending and special funds for investments in infrastructure and climate protection (law-firm note; Bundestag vote 18 March 2025, Bundesrat 21 March 2025; EUR 100 billion for the Climate and Transformation Fund and EUR 100 billion for the states; twelve-year term). Noerr, Berlin. Observation year 2025. Accessed 2026-11-03.back
  16. 17Cabinet Secretariat of Japan (ed.), Fundamental Plan for National Resilience (English page; the plan is reviewed about every five years; no five-year amount on the page read). Cabinet Secretariat, Tokyo. Observation year 2023. Accessed 2026-11-03.back
  17. 40UNVERIFIED, not opened: OECD (ed.), Good Governance for Critical Infrastructure Resilience. OECD Publishing, Paris, 2019, cited from memory. Observation year 2019. Accessed 2026-11-03.back
  18. 9IMF (ed.), 2026 Update of Resource Adequacy of the Poverty Reduction and Growth Trust, Resilience and Sustainability Trust, and Debt Relief Trusts, policy paper, 6 March 2026 (27 RSF arrangements; commitments SDR 10.3 billion, about USD 14 billion; five new RSFs in 2025 for SDR 3.4 billion). International Monetary Fund, Washington. Observation year 2026. Accessed 2026-11-03.back
  19. 10IMF (ed.), Lending, 2026 IMF Annual Report (five RSF requests agreed in the year to 30 April 2026, about SDR 1.8 billion). International Monetary Fund, Washington. Observation year 2026. Accessed 2026-11-03.back

Cite this chapter

Valadbaygi, S. (Ed.). (2026). Chapter 8: Systems in depth. In Strategic Systems Report 2026: Global Resilience Investment and National Portfolios (Baseline Edition 2026, Report No. NR-STRATEGIC-INVESTMENT-GLOBAL-2026-BASELINE) [Draft under review]. The Global Centre for Risk and Innovation (GCRI).

Every citation form of the whole report, BibTeX and RIS included, is on the edition home. Cite this report

ReportsContribute

Send evidence or a correction on Global Resilience Investment and National Portfolios.

Reports is the Consortium’s quarterly publication, written by six desks. This page sits with the Global Centre for Risk and Innovation (GCRI) Systems Evidence desk. What you know about this subject can become evidence, a case or a correction in the next edition, credited to you and published under CC BY 4.0 where it is your own work. Sent to the wrong desk, it is forwarded, not refused.

GCRI Systems Evidence deskStrategic Systems

Never send personal data, sensitive infrastructure detail or anything you have no right to share. A contribution is reviewed before use; sending it confers no authorship or editorial rights, and sponsorship never buys a finding.

CC BY 4.0 Free to read. Text and figures: CC BY 4.0. Data: CC0 1.0. Authors keep copyright. Published by GCRI Canada.

The Global Centre for Risk and Innovation

Science · evidence · measurement

Not for profit

Our articles, maps and twins are free to read and free to republish. Readers and partners keep it that way.

Partner with us

Who funds us

GCRI is a not-for-profit institution. To ask who funds a piece of work, use the funding questions form.

Independence

Editors and the expert reviewers named on each article decide what we publish. Funders and partners do not review or approve articles before publication.

Corrections policy

Licence

Articles: CC BY 4.0. Figures, maps, twins and data: CC BY 4.0. Other uses: ask through the permissions form.

Privacy choices