Climate change from increasing greenhouse gas emissions is not only impacting nature. That’s what more and more studies are showing. From health, to international development and equality, every sector is likely to be impacted. Even investors. Our researchers shared how in their latest Nature paper.

The financial sector is likely to be heavily affected by the climate crisis. It is not just the direct costs from climatic events (droughts, floods, storms…) that will be very costly. Such events will also slow down economic growth, leading to future income losses. This may snowball and increase significantly the total economic toll of climate change.

If in the next eighty years changing temperatures impact economic growth the same way as today (based on observations from the last 3 decades), income will be reduced by +- 20% compared to an economy unaffected by climate change. In a scenario with optimal adaptation and mitigation measures, however, this income would only be reduced slightly.

This study’s results stress that climate change mitigation is essential for future economic development and in the interest of investors. Interested in how climate change may reduce societal welfare? Have a look at the Nature publication from our scientists here.

Published on : 01 July 2021