The climate crisis is getting worse, impacts are intensifying and their effects are already being felt across communities, businesses and markets globally, resulting in starvation, poverty and increased financial risks.
That is the stark warning from three new reports this week that all pointed to the same stark conclusion — the climate crisis is already having a severe impact all around the world, and unless “massive and immediate” action is taken, future prospects for global businesses and communities remain bleak.
A new report by Oxfam revealed that extreme hunger has more than doubled in 10 of the world’s worst climate hotspots over the past six years. The climate vulnerable hotspots — which the charity defined as those with the highest number of United Nations appeals driven by extreme weather events — have suffered a 123 percent increase in acute hunger since 2016.
“Climate change is no longer a ticking bomb, it is exploding before our eyes,” warned Gabriela Bucher, Oxfam International’s executive director. “It is making extreme weather such as droughts, cyclones and floods — which have increased five-fold over the past 50 years — more frequent and more deadly.”
Climate change is no longer a ticking bomb, it is exploding before our eyes.
Somalia, Haiti, Djibouti, Kenya, Niger and Afghanistan were among the countries highlighted, with the report finding that 48 million people across these areas are suffering from acute hunger, up from 21 million in 2016. Of those suffering, 18 million were found to be on the brink of starvation.
Climate impacts have played a central role in the hunger crisis. Droughts in Somalia and Kenya have caused widespread famine and malnourishment. In Somalia, 1 million people have been forced to flee their homes because of the drought, and in Kenya, the current drought has killed nearly 2.5 million livestock and left 2.4 million people hungry, including hundreds of thousands of children left severely malnourished. More broadly, heatwaves and droughts across much of the northern hemisphere this summer have pushed up the price of agricultural commodities on global markets.
“For millions of people already pummelled down by ongoing conflict, widening inequalities and economic crises, repeated climate shocks are becoming a backbreaker,” Bucher added. “The onslaught of climate disasters is now outpacing poor people’s ability to cope, pushing them deeper into severe hunger.”
Oxfam highlighted that climate-fuelled hunger is a “stark demonstration of global inequality.” Countries that are least responsible for the climate crisis are suffering the most from its impacts and are also the least resourced to cope with it, the charity said.
The report found that the countries in the climate hotspots were collectively responsible for just 0.13% of global carbon emissions as well as sitting in the bottom third of countries least ready for climate change.
The report found that the countries in the climate hotspots were collectively responsible for just 0.13 percent of global carbon emissions as well as sitting in the bottom third of countries least ready for climate change. In contrast, Oxfam found that polluting industrialized nations such as those of the G20 — which control 80 percent of the world’s economy — are together responsible for over three-quarters of the world’s carbon emissions.
The charity criticized the leaders of these nations for continuing to support “mega-rich” polluting companies that are often big supporters of their political campaigns. Fossil fuel companies’ daily profits have averaged $2.8 billion over the last 50 years, with Oxfam estimating that less than 18 days of those profits would fund the entire U.N. humanitarian appeal for 2022 of $49 billion.
But it is not just in climate hotspots where the severe effects of climate change are already leading to humanitarian and economic disasters. According to a new global survey released this week by the World Economic Forum (WEF) and Ipsos, more than half of all adults said that climate change has already had a severe impact on the areas where they live.
The survey of 23,507 adults in 34 countries found that more than seven in 10 respondents, or 71 percent, said they expect climate change to have a severe effect in their regions over the next 10 years. Fully 35 percent of respondents said they expected to be displaced from their homes due to climate change by 2047.
Such fears may or may not prove to be unfounded, but they highlight how millions of people globally fear their long-term prospects and security are being undermined by increasingly visible and severe climate impacts. There is now a widespread public acceptance that the disaster afflicting Pakistan, where devastating floods submerged up to a third of the country, could quickly become an increasingly common occurence.
More than half of all adults said that climate change has already having a severe impact on the areas where they live.
“We are in a climate crisis,” said Gim Huay Neo, managing director and head of the Centre for Nature and Climate at the WEF. “The survey results affirm that across the world, people already feel the effects today and fear for their futures tomorrow.”
Businesses and financial markets also need to be prepared for the risks climate impacts present. New research from S&P Global Sustainable1 this week found that 92 percent of the world’s largest companies will have at least one asset at high exposure to a climate-related physical hazard by the 2050s.
S&P’s dataset, “Physical Risk Exposure Scores and Financial Impact,” assesses the exposure of an asset or company to climate change hazards and provides new financial impact metrics which reflect the projected future financial costs of changing hazard exposure for more than 20,000 companies and 870,000 assets.
The analysis found that over a third of the world’s largest companies have at least one asset where the physical risks of climate change are equivalent to 20 percent or more of that asset’s value by the 2050s.
The dataset covers exposure to eight climate hazards, including extreme heat, extreme cold, wildfire, water stress, drought, coastal flood, fluvial flood and tropical cyclones. It uses data to predict the effects of these hazards from based on Shared Socioeconomic Pathway (SSP) climate change scenarios.
While understanding and adapting to climate risks is essential for all businesses, not every community or business will be able to adapt to worsening climate impacts.
“In 2022, many countries have experienced unprecedented weather conditions, including heat waves in the U.K.; wildfires in the U.S. and record temperatures in China,” said Steve Bullock, managing director, global head of ESG Innovation and Solutions, S&P Global Sustainable. “Against this backdrop, this new dataset uses the best available climate models and integrates a new climate change hazard, drought, to ensure market participants have access to high-quality data and evidence-based insights as they seek to understand and adapt to their exposure to the physical risks of climate change.”
However, while understanding and adapting to climate risks is essential for all businesses, not every community or business will be able to adapt to worsening climate impacts. As world leaders prepare to meet at the COP27 Climate Summit in Egypt in November, Gabriela Bucher, Oxfam International’s executive director, urged governments to respond to a crisis that is already unfolding.
Unless “massive and immediate” action is taken, the effects of climate change including extreme hunger “will continue to spiral,” she warned. “Ahead of U.N. General Assembly meetings this week, and COP 27 in November, leaders especially of rich polluting countries must live up to their promises to cut emissions. We cannot fix the climate crisis without fixing the systemic inequalities in our food and energy systems. Increasing taxation on super polluters could easily cover the cost. Just 1 percent of the fossil fuel companies’ average annual profit would generate $10 billion, enough to cover most of the shortfall in funding the U.N. humanitarian food security appeal.”
The share of large companies with assets at high physical risk could be reduced to 39% by the 2090s, if the world proves successful at limiting temperature increases to 2C.
She also suggested that canceling debt could help developing economy governments free up resources to invest in climate mitigation and resilience measures. “Rich and most polluting nations have a moral responsibility to compensate low-income countries most impacted by the climate crisis,” she said. “This is an ethical obligation, not charity.”
This bolstering of climate resilience and increase in support for the most climate-vulnerable nations also has to come in conjunction with an acceleration of global efforts to curb emissions. While S&P’s data is primarily focused on assisting companies to prepare for worsening climate impacts, it also highlights how companies could reduce their exposure to climate risk if global emissions targets are met. For example, the share of large companies with assets at high physical risk could be reduced to 39 percent by the 2090s, if the world proves successful at limiting temperature increases to 2C, according to the report.
As WEF’s Gim Huay Neo warned: “The crisis affects everyone. We have to work together, to adapt to climate change, and concurrently, accelerate and scale action towards a healthier, greener and more sustainable planet. We need a holistic and systems approach, involving all stakeholders — governments, businesses and civil society — to co-create solutions and effectively respond to this crisis.”
Without such a response the already devastating climate impacts afflicting countries all around the world will only worsen, with catastrophic consequences for communities and economies everywhere. The lessons for governments, businesses and investors should be clear. Alongside continuing efforts to slash emissions, huge investment in climate resilience, adaptation and managed migration will be required in the coming decades to avert rolling humanitarian disasters and a reversal of economic development. At the same time, as diplomats convening for this autumn’s COP27 climate summit will soon discover, the calls for support to help climate-vulnerable countries cope with the loss and damage they are facing are going to become unanswerable.