Climate change has global impacts that will continue to intensify unless people and businesses adapt. The financial sector can help mobilise and support sustainable practices to limit the impacts of climate change and reduce the risk of climate-driven exploitation.
Whilst the world is already feeling the impacts of climate change such as heatwaves, climate induced disasters are likely to continue unless we take steps to change our practices. The impacts of climate change will continue to destroy infrastructure and disrupt livelihoods, increasing mass migration of communities. This climate induced migration often drives workers from traditionally rural agricultural sectors to urban areas where they often enter informal and high-risk sectors for exploitation. Additionally, investors need to recognise the implications these events will have on the financial sector, specifically the risk from infrastructure and property damage. Insurance policies and claims could increase at a higher frequency due to loss caused by natural disasters.
To build resilience in communities and avoid additional risks, the financial system can help mobilise resources for climate mitigation and adaptation. For example, if banks adjust their lending policies by giving discounts on loans for sustainable projects, they could support the long-term implementation of climate change disruption.
What can your organisation do?
- Invest and provide loans for sustainable projects, that aim to implement long term solutions and strategies to mitigate climate risk.
- Build programmes to support vulnerable communities’ accessibility to finances, particularly as mass migration increases and these communities become at greater risk of exploitation.
