Are we truly investing in resilience, or are we still paying for disasters? Each year, governments, development agencies and financial institutions spend billions responding to crises that could have been prevented. Losses linked to natural hazard events already average $202 billion annually, but the Global Assessment Report 2025 suggests the real figure could be closer to $2.3 trillion. Whatever the precise number, this trajectory is unsustainable. We cannot continue to fund the consequences of disasters without addressing their construction in the first place.

While climate-sensitive hazards are becoming more frequent and intense, attributing growing losses solely to climate misses the point. Disasters are not “natural.” They are the outcome of hazards colliding with the vulnerabilities, exposures and capacities we create through our development choices. In other words, risk from disasters is socially, politically and economically constructed – and this is where the investment challenge lies.

Are we measuring the right investments?

Globally, the discourse on resilience investment often focuses on tracking budget lines labelled “disaster risk reduction.” But does this really capture the full picture? Are we accounting for public spending on flood control, water harvesting and environmental protection? On social safety nets that shield the most vulnerable? On “hidden” investments in maintaining critical infrastructure that actually make it resilient?

If not, we risk underestimating, and undervaluing, what investment in resilience truly means. Worse, we may continue to invest heavily in the wrong places.

Moving beyond the current disaster risk reduction paradigm

The prevailing model is dominated by corrective and reactive approaches. We spend heavily to protect development gains from external threats, or to recover after disasters, but too little to address the root causes of risk.

We need a new approach that:

· Recognizes “risk” as socially constructed and endogenous to development.

· Broadens investment to anticipate and manage prospective risks – those that are emerging or yet to come.

· Accounts for the systemic nature of risks – in a deeply interconnected world, shocks cascade across sectors and borders, amplifying impacts.

Investing across the anatomy of risk

So what could meaningful investment in resilience actually look like?

Risk is a function of three elements: exposure, vulnerability and capacity.

Investments to reduce exposure means ensure public and private assets – from homes and hospitals to transport networks and energy systems – are located, designed, and maintained to withstand hazards, follow robust quality assurance for building, as well as maintaining, green and grey infrastructure.

Equally important is reducing vulnerability. Too many people today, especially the poor and marginalized, live and work in fragile housing, precarious jobs and degraded environments. Investments in social protection, health services, ecosystem management, and inclusive governance become critical levers to safeguard lives and livelihoods.

At the same time, we must continue to build capacity. Communities, institutions and governments must be equipped to manage the risks generated by development itself. This calls for investments in risk governance, education, early warning, and community preparedness that allow governments and people to manage risks proactively rather than become passive victims.

Learning from practice

A key approach to guiding investments in resilience is analyzing the profile of losses sustained after each adverse event. Many governments conduct Post-Disaster Need Assessments (PDNAs) to capture the socio-economic impact of disasters and identify sectors where vulnerabilities are highest, often highlighting infrastructure and social services.

However, these assessments typically focus on large-scale events, and macro-level data often overlooks smaller, high-frequency events – like localized floods, heatwaves, or storms – that individually seem minor but steadily erode local economies and compound losses over time. Improving the monitoring and analysis of such events is essential to ensure investments target the areas of greatest risk at all levels.

A complementary approach to data is evident in the Caribbean and Africa, where governments are translating “resilience” from an abstract concept into clear, actionable investment priorities.

In Caribbean Small Island Developing States (SIDS), this includes strengthening social protection for the poor and most vulnerable, investing in resilient infrastructure, preserving and protecting ecosystems, and exploring new growth sectors to expand economic opportunities for more citizens.

Africa is also developing comprehensive frameworks to help governments identify actionable investments and the enabling policies needed to sustain and distribute the dividends of resilience-building more widely across society. These approaches demonstrate how resilience can move from principle to practice, guiding both public and private investment decisions.

Building on these approaches, UNDP works with governments to turn insights from loss analyses and resilience frameworks into actionable strategies. We provide technical support, policy guidance, and capacity-building to help countries better monitor recurring, low-impact events, strengthen governance, and design investments that reduce exposure and vulnerability while expanding adaptive capacity.

Debt and resilience are also closely linked. Many developing countries face high debt burdens that limit their ability to invest in resilience. Yet, when structured well, “good debt,” such as SDG-aligned or resilience bonds, can unlock capital for long-term risk reduction and climate adaptation. UNDP’s Insurance and Risk Finance Facility (IRFF), for instance, works with countries to build instruments that channel private and public finance into projects with measurable social, environmental, or resilience outcomes, turning borrowing into a tool for sustainable development.

The way forward

So how do we proceed? By asking the hard questions:

· Are recovery investments designed to reduce future risks, or simply to restore what was lost?

· Are budgets incentivizing resilience in infrastructure, ecosystems, and social systems?

· Are we aligning public and private investment flows to manage risks proactively?

The answers can lead us toward a decisive shift. The theme for this year’s International Day for Disaster Risk Reduction – Fund Resilience, Not Disasters – echoes this sentiment. The costs of inaction are staggering. The opportunities – to protect lives, livelihoods and economies – are within reach.

The real question is no longer whether we can afford to invest in resilience. It is whether we can afford not to.