In 2012, UN-Habitat created a tool to measure the sustainability of cities. This tool known as The City Prosperity Index was accompanied by a conceptual matrix, the Wheel of Urban Prosperity. In 2013, UN- Habitat received numerous requests from local authorities and central governments to estimate their respective prosperity indexes. Mayors and other decision-makers wanted to know how their cities feature in comparison with other cities. This included knowledge on how to improve ratings and measurements of cities towards the prosperity path, including gaining critical insights in to which programmes and policies work, and the possible impacts these actions may have.

As a result of these demands, UN-Habitat transformed the City Prosperity Index into a global initiative known as the City Prosperity Initiative.