Skip to content
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
Insurance Journal - Property Casualty Industry News

Featured Stories

  • Aon Promotes Reinsurance Leaders
  • Nexus CEO Faces Investigation for ‘Offensive’ Email
  • Articles
  • Jobs
  • Markets

Current Magazine

current magazine
  • Read Online
  • Subscribe
  • Login
  • Front Page
    • National
    • International
    • Most Popular
    • Magazine
    • Forums
    • Blogs
    • Videos/Podcasts
    • Newsletters
  • News
    • Most Popular
    • National
    • International
    • East
    • Midwest
    • South Central
    • Southeast
    • West
  • Magazines
  • Research
  • Directories
  • Jobs
  • Features
    • Events
    • Forums
    • Market Directories
    • Quotes
    • Polls
    • Rankings & Awards
    • Insurance Giving Back
  • Subscribe

Global Construction Industry Faces Climate Change Challenges, Opportunities: Marsh

By L.S. Howard | October 1, 2021
Email This Subscribe to Newsletter
  • Article
  • 1 Comment

Climate change and the race to net zero greenhouse gas emissions (net zero) are arguably the greatest challenges that face the construction industry – but will drive new opportunities, according to a report published by Marsh and Guy Carpenter, subsidiaries of Marsh McLennan.

The infrastructure boom is set to fuel global economic growth over the next decade, with global construction output expected to grow by 6.6% in 2021 and by 42% by 2030, driven largely by government stimuli and the demand for residential construction, said the report, titled “Future of Construction: A Global Forecast for Construction to 2030.”

The global construction market is expected to grow by US$4.5 trillion over the decade to 2030 to reach US$15.2 trillion, said the report, noting that just four countries — China, India, US, and Indonesia — will account for almost 60% of this growth. At the same time, the top 10 global construction markets are expected to account for almost 70% of the growth over the same period.

Although the near-term outlook for the global economy remains clouded by a surge in inflation, supply-chain bottlenecks and the Delta variant, the global construction industry is set to lead global economic recovery from the pandemic over the medium-term and is expected to grow faster than the manufacturing or service sectors, said the report, which was written with Oxford Economics.

However, as the sector grows, so too does the risk of greater pollution and waste, the report warned, explaining that construction and the wider built environment currently accounts for around 40% of the world’s global greenhouse gas emissions. (Editor’s note: A Marsh representative explained that “the wider built environment” relates to the construction supply chain, namely the inputs and outputs associated with construction projects.)

During the global transition to net zero, the industry needs to radically reduce the amount of carbon embedded in new construction, infrastructure and buildings, which is already a “huge challenge.”

“An emerging deconstruction industry that will reuse huge existing urban stockpiles of construction materials could reduce embedded
carbon in the construction of new buildings and infrastructure,” the Marsh report continued.

In addition, the climate crisis is driving huge demand to decarbonize energy networks and develop renewable energy, the report said, citing Saudi Arabia’s Giga Projects, which is leading net zero initiatives.

“Sustainable and quality infrastructure is a driver of economic growth and social progress and is an enabler to achieving Sustainable Development Goals (SDGs) and Paris Agreement commitments.”

Further, it continued, environmental, social, and governance (ESG)-related capital for infrastructure grew 28% in 2020, which was largely due to a flow of fundraising into sustainability-related strategies. “Given that significant equity is usually allocated to infrastructure by major construction companies and developers using their own corporate balance sheets, opportunities exist for those companies that develop new technologies, designs, and processes.”

“Climate change and the ESG agenda – and the risks and opportunities they present – are among the biggest challenges the global construction industry faces over the next decade. These forces are changing risk profiles for the sector,” commented Richard Gurney, global head of Construction, Marsh Specialty, in a statement.

“Organizations must adapt in order to harness the sector’s massive potential for growth while playing a pivotal role in the advancement of economies and communities around the world,” he said.

“The construction and engineering industry is entering a period of exciting opportunity but also one that will require new ways of approaching risk by the insurance and reinsurance sectors,” said Simon Liley, co-head, Global Engineering, Guy Carpenter.

“These dynamics call for effective knowledge sharing from industry innovators at one end all the way through to reinsurance actuaries at the other,” Liley noted. “Understanding the shifting profile of exposure, technology, and sources of capital will be important to enable insurers and reinsurers to establish underwriting platforms and offer products that meet the construction industry’s changing needs.”

Other Marsh/Carpenter projections for the industry to 2030 include:

  • Predicted average annual growth in construction of 3.6% per annum – faster than either the services or manufacturing sectors.
  • The next decade for construction will see global growth up by 35% compared to the previous decade, driven by unprecedented levels of stimulus spending on infrastructure and the unleashing of excess household savings; it will represent more than 10% of GDP in North America.
  • Global infrastructure construction is forecast to grow by an annual average of 5.1%.
  • Annual growth in UK infrastructure is expected to average 3.7%, rivaling China over the period as UK mega projects provide heightened growth.
  • Urbanization is expected to turbo charge growth in emerging markets. Overall growth of the world’s population could add another 2.5 billion people to urban areas by 2050 with almost 90% of this happening within Asia and Africa.

“It is unusual to see construction outstripping growth in both services and manufacturing over a more sustained period. We would normally expect to see construction growing faster than other sectors of the economy for shorter periods in a cyclical upturn,” said Graham Robinson, Global Infrastructure and Construction lead at Oxford Economics and lead author of “Future of Construction.”

“However, it’s not surprising that construction is expected to power the global economy over this next decade, considering the unprecedented nature of the stimulus spending on infrastructure by governments and the unleashing of excess household savings in the wake of COVID,” Robinson affirmed.

Source: Marsh

Topics Climate Change Construction

Was this article valuable?

Thank you! Please tell us what we can do to improve this article.

Thank you! % of people found this article valuable. Please tell us what you liked about it.

Here are more articles you may enjoy.

Nursing Homes Struggle With Trump’s Immigration Crackdown
California Surplus Lines Take-Up Soars as Brokers Work to Find Coverage for Clients
Three Insurers Join Ward’s Annual Top 50 P/C Ranking for 2025
Aon Promotes Reinsurance Leaders as John Neal Takes a New Direction With AIG

Written By L.S. Howard

Latest Posts:
  • Marsh McLennan Reports Q2 Organic Revenue Growth of 4%, Down From Q2 2024
  • Aon Promotes Reinsurance Leaders as John Neal Takes a New Direction With AIG
  • First-Half 2025 Insured Losses From Natural Cats Hit $100B, Driven by US Events
  • London Market Brokers, Associations Welcome Move to Create UK Captive Domicile
More From Author

Interested in Climate Change?

Get automatic alerts for this topic.

Email This Subscribe to Newsletter
  • Categories: International & Reinsurance NewsTopics: Climate Change, construction insurance, environmental social and governance (ESG) criteria, global warming, greenhouse gas emissions, Guy Carpenter, infrastructure, Marsh, net zero emissions, Research and Trends
  • Have a hot lead? Email us at newsdesk@insurancejournal.com

Latest Comments

  • October 3, 2021 at 9:57 pm
    Tiger88 says:
    Oh no...not climate change!!!!! We're all going to die....10 years ago apparently.

Add a CommentSee All Comments (1)Add a Comment Cancel reply

Your email address will not be published. Required fields are marked *

*

*

More News
Chinese Hackers Still Trying to Break Into Telecoms Across Globe
Waymo Expands in Austin After Tesla Launches Robotaxi Competitor
AM Best Revises Outlook to Negative for Texas’ Southern Vanguard
NHTSA Shedding More Than 25% of Employees
More News Features

Read This Next

  • Global Construction Industry Faces Climate Change Challenges, Opportunities: Marsh
  • Michigan Construction Company Sued for Allegedly Scamming Customers
  • Former Lloyd's CEO Neal to Lead General Insurance as President at AIG
  • Nebraska Sues GM Over Alleged Unauthorized Collection of Driving Data
  • Appeals Court Nixes Class Actions Against Progressive Over Actual Cash Value

Insurance Jobs

  • Director of Property Liability Claims - Wilsonville, Oregon
  • Vice President of Life Operations - Lansing, MI
  • Sr. Middle Market Underwriter, Account Executive Officer - Louisville, KY
  • Trainee Property Adjuster – Inside – Hudson, OH - Hudson, OH
  • Major Case Specialist, Specialty Liability – Construction Defect - Tampa, FL
MyNewMarkets
  • How Embedded Insurance Supports Real Livelihoods in the Growing On-Demand Economy
  • How to Keep Third-Party Events from Becoming First-Party Losses
  • Is It Covered: Auto Coverage Under a CGL Policy
  • When Harassment Follows You Home: Managing EPL Risk in a Remote Work Era
  • Trouble Brewing? 6 New Risks for Winery and Brewery Clients
Claims Journal
  • Judge Allows US Authors Suing Anthropic Can Band Together in Copyright Class Action
  • As Extreme Heat Scorches US, Employee Protections Stalled by Politics
  • Chinese Group Hacks 'Edge' Devices in Ongoing Telecom Targeting
  • Report Shows Cargo Theft up 13% in 2Q as Organized Crime Targeted High-Value Goods
  • US Auto Safety Agency Shedding More Than 25% Of Employees
Academy of Insurance education
  • July 17 Garagekeepers Coverage, Don't Get Caught With Your Coverage Down
  • July 22 How To Write: Umbrella
  • July 24 Navigating The Impact of Hospital Closures on Workers' Compensation
  • July 31 In The Wake: Personal Lines Issues After a Huge Storm

Insurance News

  • News by Region
  • News by Topic
  • Yesterday

Site Search

Features

  • Insurance Markets Directory
  • Forums
  • A.M. Best Company Ratings
  • Industry Events
  • Agencies For Sale
  • Newswire
  • Insurance Jobs
  • Rankings & Awards

Connect with us

  • Email Newsletters
  • Magazine Subscriptions
  • For Your Website
  • RSS Feeds
  • Twitter
  • Facebook
  • LinkedIn
  • Do Not Sell My Info

Insurance Journal

  • Submit News
  • Advertise
  • Subscribe
  • Reprints
  • Link to Us
  • Contact Us

Wells Media Group Network

  • Insurance Journal
  • MyNewMarkets.com
  • Claims Journal
  • Insurance Journal TV
  • Academy of Insurance
  • Carrier Management
© 2025 by Wells Media Group, Inc. Privacy Policy | Terms & Conditions | Site Map