Climate change disrupts where people live, what they can eat, and how they earn a living. Limiting the warming of the planet also means limiting the number of lives affected by climate-generated fragility and conflict. Climate change and conflict are among the leading causes of global hunger. Climate change affects food security as changing temperatures, rainfall variability, and more frequent and intense extreme weather events are straining water supplies and reducing crop yields, and causing food prices to rise and be more volatile. In 2019, up to 25.9% of the world’s population faced moderate or severe levels of food insecurity, up from 22.4% in 2014. This number is projected to increase further, particularly in Africa and Latin America and the Caribbean (FAO, 2020).   The effects of climate change and conflict on food and water availability and crop yields are linked to increases in migration and displacement, as communities migrate as an “adaptation strategy”, often from rural to urban areas (IEP, 2020). Growing urban centres exacerbate the potential for conflict in fragile conditions. Sharp increases in the number of people puts pressure on public goods and services, especially in secondary cities that lack the investment and infrastructure needed to sustainably cope with a growing population (EIU Safe Cities Index, 2019). Cities are also vulnerable to climate change, with a projected 800m urban inhabitants at risk from the impacts of rising seas and storm surges by 2050 (IPCC, 2019).   Effective climate adaptation and building resilience in climate-vulnerable settings are therefore essential to conflict prevention and facilitating long-term peace and prosperity.    

 

 

 

  Climate change and conflict are among the leading causes of global hunger. Climate change affects food security as changing temperatures, rainfall variability, and more frequent and intense extreme weather events are straining water supplies and reducing crop yields, and causing food prices to rise and be more volatile. In 2019, up to 25.9% of the world’s population faced moderate or severe levels of food insecurity, up from 22.4% in 2014. This number is projected to increase further, particularly in Africa and Latin America and the Caribbean (FAO, 2020).   The effects of climate change and conflict on food and water availability and crop yields are linked to increases in migration and displacement, as communities migrate as an “adaptation strategy”, often from rural to urban areas (IEP, 2020). Growing urban centres exacerbate the potential for conflict in fragile conditions. Sharp increases in the number of people puts pressure on public goods and services, especially in secondary cities that lack the investment and infrastructure needed to sustainably cope with a growing population (EIU Safe Cities Index, 2019). Cities are also vulnerable to climate change, with a projected 800m urban inhabitants at risk from the impacts of rising seas and storm surges by 2050 (IPCC, 2019).   Effective climate adaptation and building resilience in climate-vulnerable settings are therefore essential to conflict prevention and facilitating long-term peace and prosperity.

The Covid-19 pandemic has exposed a wealth of interconnections – between ecological and human wellbeing, between economic and environmental fragility, between social inequality and health outcomes, and more. The consequences of these connections are now filtering through, reshaping our society and economy.

In this setting, the need to integrate environmental, social and governance (ESG) factors when investing has become even more critical. Institutional investors must employ ESG not just to mitigate risks and identify opportunities, but to engage with companies to bring about the positive change needed to drive a sustainable economic recovery in the post-Covid world.

In order to understand how ESG could be both a new performance marker and a growth driver in this environment, as well as how institutional investors are using ESG to make investment decisions and to assess their own performance, The Economist Intelligence Unit (EIU), sponsored by UBS, surveyed 450 institutional investors working in asset and wealth management firms, corporate pension funds, endowment funds, family offices, government agencies, hedge funds, insurance companies, pension funds, sovereign wealth funds and reinsurers in North America, Europe and Asia-Pacific.

 

Download the report and infographic to learn more.