The climate crisis is fueling a human health emergency. Numerous climate-sensitive health risks are scientifically established:
- Heat waves can cause illness and death;
- Smog, ozone, and allergenic pollen cause respiratory and cardiovascular illnesses;
- Disasters such as extreme weather events can trigger both physical and mental damage;
- Infectious diseases such as vector borne illnesses are on the rise;
- Interruptions to the food supply chain from extreme weather, drought, flooding and warming seas creates food security risk and contributes to malnutrition.
The human and economic costs of these increased risks to health are potentially enormous. The current coronavirus pandemic is just one stark reminder of the toll a disaster can take on society. Climate change has become a determining factor in the likely health outcomes for populations in a variety of locations and socioeconomic groups.
From an investment perspective, assessing portfolio risk from climate change has become critical. How are sectors, regions and companies responding to current threats? What preparations are they making for future extreme weather events or infectious disease outbreaks in terms of supporting their employees, customers and other stakeholders (and, of course, protecting their bottom line)? Institutional investors are increasingly considering such analysis as part of their fiduciary duty to clients and beneficiaries – and those who are not, we would argue, are not doing their jobs properly.
In this report, we discuss the relationship between climate change, socioeconomic status and health. We highlight the primary categories of climate impact, the populations most affected, and how investors may play a role in funding solutions.
In outlining potential investment solutions, we take a holistic approach given the interconnectedness of contributing factors. We focus on investment strategies that address specific climate-related interventions. Ultimately, however, solving the root causes of climate change and the subsequent effects on human health will require a comprehensive approach, one that considers the interplay of relevant issues: health, climate, transportation, education, financial stability, among others.