Key finding

Despite billions facing a cost-of-living crisis, affordability does not factor into the sustainability agenda for 75% of urban companies

The world faces a cost-of-living crisis predicted to leave 3 billion people without adequate affordable housing and basic services by 2050. Companies play a direct role in this crisis; in many cities, essential services such as transportation and utilities are privatised, while large real estate developers and builders dominate the market, significantly impacting property prices and availability of affordable housing. Despite this, 75% of the companies score zero on affordability, failing to report, plan ahead or take concrete actions. This affects a large segment of the global urban population. For instance, the 50 energy companies and 30 water companies in the benchmark impact 2.5 billion and 850 million people, respectively. Poor performance is particularly concerning in low- and middle-income regions facing rapid urbanisation, where only 1 in 10 companies operating in these regions takes any steps to address affordability. Affordable housing and services are vital for urban sustainability and should be prioritised by the private sector. Additionally, regulators must establish common reporting standards and enforce stronger regulations to ensure equitable access to housing and basic services for all.

Despite contributing directly to the cost-of-living crisis affecting billions, 75% of urban companies fail to tackle affordability

Authors: Hannah Itcovitz and Besmira Dyca

Cities around the world are becoming increasingly unaffordable, particularly in the Global South. In major Sub-Saharan cities like Nairobi, rent-to-income ratios have reached 311%, pushing many into informal housing and preventing access to critical infrastructure, services and job opportunities. In Asian megacities like Mumbai (Praja, 2014) and Metro Manila (Ballesteros, Ramos, & Ancheta, 2024), rising house prices have led to extreme overcrowding and inadequate housing quality. At the same time, global consumer price inflation peaked at 9% in 2022 (ILO, 2022), and 3 out of 4 consumers remain concerned about the rising cost of everyday expenses like food and energy (Euromonitor International, 2024).

Numerous studies show the link between affordability and development outcomes, including water and energy poverty, overcrowding and informality, and nutrition and health, with low-income households suffering the most (Habitat for Humanity, 2021). In 30 years, unaffordable housing will push an additional 2 billion people into living in slum-like conditions in cities, adding to the 1 billion already living in such environments (United Nations, 2023). This makes SDG11 one of the slowest-progressing goals (WEF, 2023) and underscores the critical role of affordability in reducing inequalities.

Over the last decades, a growing number of countries worldwide (Estache, Gomez-Lobo, & Leipziger, 2001) have implemented housing, transport and utility sector liberalisation policies, increasing private sector involvement in housing and service provision. The 2024 Urban Benchmark assessed 300 companies that are the main providers of at least one key urban service — utilities, transport, real estate or construction — in megacities worldwide. Collectively, the 50 energy companies and 30 water companies in the benchmark service 2.5 billion and 850 million people, respectively. Their pricing decisions directly determine access to affordable housing and basic services for millions, making them a key actor in addressing the global cost-of-living crisis.

Urban companies rarely address affordability — and few stakeholders ask them to

The majority of companies in the benchmark did not identify affordability as a significant sustainability issue or priority in their disclosures, with over 75% scoring zero across all five elements of the affordability indicator.

Despite widespread support of SDG goals and government commitments to deliver affordable housing and basic services, only 10% of companies reported regularly on the affordability of their products or services and just 2% had clear commitments in the form of time–bound, measurable targets on the topic.

Figure 1: Affordability scores across 300 Urban companies

Affordability remains a clear gap in environmental, social and governance (ESG) reporting frameworks. Among the few companies that reported on it, metrics varied widely — from the number of customers receiving social tariffs, to the share of affordable products and disconnection rates for non-payment. There is also no common definition of affordability across industries; approaches vary from targeting vulnerable groups, such as those living below the poverty line, to linking affordability to income levels more broadly. The latter offers a more comprehensive perspective, recognising that affordability is not solely a concern for the poorest, but reflects a broader mismatch between service costs and household incomes. Although some standards (such as the SASB utilities standards) have begun to include elements for reporting on this topic, there is a critical need for more explicit guidelines, metrics and definitions of affordability in international reporting standards to enable tracking companies’ progress over time.

Regions experiencing the fastest rates of urbanisation and informality show the poorest performance

The assessment found that two in five companies headquartered in Europe and North America disclosed actions to improve affordability, compared to just one in ten across East Asia, Latin America and Sub-Saharan Africa. In Sub-Saharan Africa, formal housing is unaffordable for over 85% of the urban population (Kukopa, 2024).

Similarly, in Latin America, the cost of housing can reach up to 30 times the average annual income (Silva, Espinosa, & Cervantes, 2024). These figures reveal that affordability (or lack thereof) is not only an issue related to poverty or limited access to finance, but more critically, a result of the growing mismatch between rising housing and basic service prices and stagnating incomes, particularly in cities with high population growth and urbanisation pressure.

Figure 2: Affordability scores across 300 Urban companies

It is not surprising that millions live in slum or slum-like conditions: 370 million in East and South-East Asia, 238 million in Sub-Saharan Africa and 120 million in Latin America. These numbers are projected to rise significantly (United Nations, n.d.) if no serious effort is made to improve affordability of housing and basic services. Informal settlements often develop in disaster-prone areas such as floodplains, steep hillsides or deforested land, increasing the risk of climate-related calamities. Without clean energy or formal waste management services, many rely on polluting fuels and open burning of waste, driving emissions and harming local ecosystems. These ripple effects underscore a critical point: housing affordability is not only a social or economic issue — it is also a core component of environmental sustainability and must therefore be central to any serious sustainability agenda.

Lessons from the top performers

Twelve of the 13 companies that score above 50% on affordability in the benchmark are utilities, particularly those headquartered in Brazil, France and the UK.

These companies disclose a range of initiatives to prevent the exclusion of vulnerable customers, including supplementing bills, offering reduced tariffs, introducing flexible payment plans and suspending disconnections for non-payment. Six of them, including United Utilities and Veolia Environnement, have also set targets to improve affordability, such as keeping utility bills below 1% of median household income, or ensuring that 100% of customers are covered by a solidarity mechanism which guarantees service in cases of non-payment.

What could have contributed to this performance is long-term frameworks and partnerships for universal access to basic services, such as Brazil’s New Legal Framework for Water, Sanitation, Drainage and Urban Waste Services, which include plans for investment as well as clear regulations around pricing, or France’s Code général des collectivités territoriales (Articles L2224-7 to L2224-12), based on the EU Water Directive, which embeds the right to water as a legal principle and prohibits the disconnection of services. While it is not possible to confirm direct causality, these examples point to strong regulatory frameworks as important enablers of inclusive affordability solutions.

Making affordability a reporting and regulatory priority

There is an urgent need for standard setting bodies such as GRI and SASB to embed affordability in their reporting frameworks and develop a common reporting approach with clear, industry-specific metrics and definitions of affordability to allow for comparability and progress tracking.

Affordability is a key component of the right to housing in international human rights law and often in national constitutions, but it is not always legally binding or enforceable. The growing housing crisis has led to increasing calls for stronger regulatory frameworks and making corporate reporting on this topic mandatory (OHCHR, 2023). Local authorities must take measures to enforce and evaluate existing policies and initiatives, particularly those linked to affordable housing, to push for greater corporate action and identify what works well.

Companies in turn must adapt to growing public demands for affordability to sustain business resilience and reliability. Some governments are already responding to public concerns over the cost-of-living crisis by introducing stronger rent control and tenant protection regulations, such as in the cases of Brazil, and Philippines. Preparing for changing national and local policy landscapes, companies should start integrating affordability into their sustainability plans and strategies, diversifying their portfolios to include more affordable housing, aligning their pricing models to different income levels and implementing energy-efficiency upgrades while ensuring that cost savings are transferred to tenants. By doing so, companies would not only meet regulatory requirements but strengthen their reputations as socially responsible businesses — ultimately contributing to more inclusive urban environments.

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