Climate change could cost London’s economy up to £36bn a year by the 2050s without further adaptation, according to a report published by the Mayor of London and London Councils.

The Heat Ready London Technical Report estimates annual climate-related damage of between £16bn and £36bn, equivalent to around 3% of London’s economy. The estimate covers potential disruption to businesses, lost working hours and productivity, pressure on services and damage to essential infrastructure.

The report highlights the exposure of critical infrastructure and business operations. During the 2022 heatwave, buckled rails caused cancellations and speed restrictions while two datacentres at Guy’s and St Thomas’ hospitals failed, disrupting patient care and requiring £1.4m of unplanned spending. London’s water consumption also rose by 50%.

BusinessLDN chief executive John Dickie said: “This new research underscores the vital role that investment in climate resilience plays in supporting London’s economy. Rising temperatures affect businesses in a range of ways – such as disruption to travel services, reduced customer footfall or staff being unable to work effectively.”

Professor Emma Howard Boyd, chair of the National Heat Risk Commission, added: “This report puts a number on inaction: climate-related damage could cost London up to £36bn a year by the 2050s, driven by temperatures that are anything but normal. To put that into context, that is more than double the estimated £16bn annual cost of reaching net zero across the whole of the UK."

The report identifies 37 priorities across buildings, business, emergency preparedness, green space, health and care and infrastructure. It calls for investment in adapting buildings and protecting transport, water, energy and communications networks.

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