Stormwater management: adapting to a wetter world

As global temperatures rise, extreme rainfall is becoming more common. The more frequent flooding events that follow carry rising human and financial costs. In the five years to 2022, economic losses from global floods totalled US$286bn, up 40% on the preceding five-year period.¹

Rising incidence and value at risk from floods is expected to drive surging investment in stormwater infrastructure. We believe this will support demand for innovative products and services that help better manage risks to property and life.

A hard rain’s a-gonna fall

Atmospheric water levels are reaching new highs: for every 1°C increase in temperature, 7% more moisture can be held in the air. As well as reinforcing the cycle of global warming – water vapour acts as a greenhouse gas – it also magnifies the intensity of rainfall.²

Extreme rainfall events previously expected once every 50 years now occur once in five years – and are roughly 20% more intense.³ In Texas this July, four months of rain fell within a few hours, leading to flash floods on the Guadalupe River that killed at least 135 people and destroyed surrounding areas.⁴

Impermeable surfaces make urban areas particularly vulnerable to the worst impacts of extreme rainfall. One study found that for every one percentage point increase in the area of US cities’ roads, pavements and parking lots, the annual flood magnitude in nearby waterways increases by 3.3%.⁵ The toll of catastrophic floods in Valencia in October 2024, which cost 0.2% of Spanish GDP and more than 200 lives, was exacerbated by rapid urban expansion.⁶

Urban infrastructure needs to adapt

According to Global Water Intelligence, the design capacity of existing urban water infrastructure falls increasingly short of what is needed to cope with more intense rainfall events. It estimates that municipal water infrastructure spending needs to rise sixfold by 2040 to achieve historic levels of water security amid increasingly severe weather.⁷

Of the US$20tn in capital that it estimates need to be employed by 2040, around US$4tn would be required for stormwater and flood management.

Source: Global Water Intelligence, 2025: Rethinking Resilience

Cities’ need to upgrade water infrastructure to adapt to a changing climate supports demand for the services of engineering consultancies specialising in water management. Dutch-listed Arcadis, for example, recently worked on a landmark project to develop a sustainable urban rainwater management system in Berlin. The ‘Sponge City Berlin’ project aims to protect the city from the impacts of flooding using tools like green roofs, artificial water basins and semi-permeable pavements.

Alongside greater use of nature-based solutions, cities and utilities also need to invest in physical equipment to divert and store excess surface water to minimise damage and disruption. Stormwater management hardware includes corrosion-resistant thermoplastic pipes, drainage structures and retention chambers. Advanced Drainage Systems has established a dominant market position in the US by leveraging a national sales and distribution platform, strong engineering support and high-quality manufacturing.⁸

The US-listed company also offers systems that capture and treat stormwater that often contains heavy metals, oils, nitrogen and other pollutants as run-off from roads and industrial sites, as well as farmland. If not captured, these will be deposited back into water systems or the wider environment, with possible penalties for infrastructure owners who do not take reasonable precautions.

As the likelihood of extreme rainfall rises, so too will the costs of unpreparedness. It is therefore our conviction that leading suppliers of the hardware needed to divert, store and treat stormwater – as well as consultants designing system-wide solutions – will play an essential role in cities’ adaptation to a changing climate.

¹ Swiss Re, December 2023: Natural catastrophes in focus: Floods
² Copernicus, March 2025: Copernicus Climate Change Service tracks record atmospheric moisture and sea surface temperatures in 2024
³ Met Office, May 2024: Climate change drives increase in storm rainfall 
⁴ BBC, July 2025: Three key factors that made Texas floods so deadly
⁵ Gies, E., May 2020: Expanding Paved Areas Has an Outsize Effect on Urban Flooding. Scientific American
⁶ Global Network of Civil Society Organisations for Disaster Reduction, December 2024: The 2024 Spain Floods: Failures in Early Warning, Action, Coordination, and Localisation
⁷ Global Water Intelligence, May 2025: Rethinking Resilience: How a new era of extremes is changing how utilities invest
⁸ Advanced Drainage Solutions, July 2025: ADS’ First Quarter 2026 – Financial Results

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