Chinese cities tumble down Global Cities rankings on climate concerns

Environmental issues cost Chinese cities Beijing and Shanghai their places in the top ten of Schroders’ Global Cities Index. Poor air and water quality saw Beijing fall 11 places to 19 and Shanghai fall 13 places to 20.

Los Angeles (LA) retained its position at the top of the index for the fourth year in a row. But its overall score slipped because of a mediocre Environmental Impact Score (EIS).

EIS was introduced this year to quantify which cities have the lowest environmental impact.

London holds on to its number two position, despite Brexit concerns. The UK’s financial centre continues to attract multi-national companies, is home to outstanding universities and received a good EIS.

Schroders’ Global Cities Index, now in its fifth year, ranks the economically strongest cities for global real estate investing based on three proprietary categories: the Economic Impact Score (EcIS), the University Impact Score (UIS) and, for the first year, the Environmental Impact Score (EIS).

Global Cities Index

Chinese cities down but not out

Chinese cities fared less well on EIS, causing them to fall in the rankings.

Although Beijing and Shanghai score poorly on air and water quality, they still hold positions in the top 20 (19 and 20 respectively), given their high ratings in the other impact scores.

Schroders remains extremely optimistic for Chinese cities as they convert to low emission fuels, but this is not yet reflected in the data.

Tom Walker, Co-Head of Global Cities, said:  “Cities are responsible for more than 70% of global CO2 emissions. How they respond to the demands of rapid global urbanisation, as well as environmental and social concerns, represents both a challenge and opportunity for policy makers, residents and investors.

“Cities with poor EIS are the ones which require the strongest policy response in order to safeguard their futures. There are many examples of cities with a poor EIS score that are at the vanguard of sustainable urban policies.

“We expect to see many of these cities improve their EIS score over the coming years, in particular the Chinese cities. Whilst China’s greenhouse gas emissions are approximately 27% of the world’s total, they are lower on a per capita basis than the US.

“We believe the transition to renewable energy from coal and the increasing utilisation of electric vehicles are two examples where emissions from Chinese cities will decrease at a fast pace.”

Stockholm enters top 30 for the first time

Notable movers include Stockholm, which entered the top 30 for the first time, in 29^th place due to its strong EIS and GDP score. It is the only Scandinavian city to make the top 30.

US cities Seattle (up 10 places to 5^th) and Austin (up 7 places to 18^th) also climbed the list.

Both cities are at the forefront of the knowledge economy and attract new jobs that pay well compared to other locations. This result is despite the fact that the two cities are not large compared to global peers.