Page 145 - U4SSC KPIs Verification Manual - A guide for verifiers

Dimension Society and Culture
Sub-Dimension Safety, Housing and Social Inclusion

Category Safety
KPI Name Disaster Related Economic Losses
KPI No. SC: SH: SA: 2C Type: Core Type: Sustainable

Definition / Natural disaster related economic losses as a percentage of the city’s GDP
Description

Rationale / City shall report on the “total economic impact that consists of direct economic loss
Interpretation / and indirect economic loss.
Benchmarking
Direct economic loss is the monetary value of total or partial destruction of physical
assets existing in the affected area. Direct economic loss is nearly equivalent to
physical damage.
Indirect economic loss: a decline in economic value added as a consequence of
direct economic loss and/or human and environmental impacts.
Annotations: Examples of physical assets that are the basis for calculating direct
economic loss include homes, schools, hospitals, commercial and governmental
buildings, transport, energy, telecommunications infrastructures and other
infrastructure; business assets and industrial plants; and production such as crops,
livestock and production infrastructure. They may also encompass environmental
assets and cultural heritage.
Direct economic losses usually happen during the event or within the first few
hours after the event and are often assessed soon after the event to estimate
recovery cost and claim insurance payments. These are tangible and relatively easy
to measure.
Indirect economic loss includes microeconomic impacts (e.g., revenue declines
owing to business interruption), mesoeconomic impacts (e.g., revenue declines
owing to impacts on natural assets, interruptions to supply chains or temporary
unemployment) and macroeconomic impacts (e.g., price increases, increases in
government debt, negative impact on stock market prices and decline in GDP).
Indirect losses can occur inside or outside of the hazard area and often have a time
lag. As a result, they may be intangible or difficult to measure.” (UNISDR)
A declining trend and lower values are considered positive.

Source(s) NOTE – Terminology. Retrieved from <https:// www .unisdr .org/ we/ inform/
terminology>
Methodology Calculate as:

Numerator: Total economic losses (last annual reporting period) related to
disasters.
Denominator: GDP of the city.
Multiply by 100.

Unit Percentage

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