Climate change is directly affecting both the environment and humankind. One of the most significant outcomes of climate change is deteriorating health. Dealing with the aftermath would be less challenging if preventative solutions were more efficient. As with many aspects of positive change, preemptive efforts to minimise climate-related health risks require significant investments. Here is what investors can do to scale up solutions that prevent negative climate impacts on health.
What Health Issues Occur Due to Climate Change
Global warming aggravates natural disasters like hurricanes, wildfires, earthquakes, heatwaves and floods. These adverse events lead to an increased number of injuries and deaths. Besides, droughts and floods may decrease crop yields, causing acute levels of hunger in some parts of the world. Next to physical injuries, natural disasters can cause stress, anxiety, depression, and other mental health disorders.
Rising temperatures can also lead to heat-related illnesses such as heat exhaustion, heatstroke, and dehydration, especially among vulnerable populations. They may worsen existing heart or blood pressure conditions as well.
In addition, climate change can worsen air quality. It naturally leads to growing respiratory conditions such as asthma and chronic obstructive pulmonary disease (COPD). Moreover, breathing problems further aggravate cardiovascular issues.
Regarding some less obvious outcomes, changes in temperature and precipitation patterns lead to the geographic expansion of insect-transferred diseases like malaria, dengue fever, Zika virus, Lyme disease, and West Nile virus. It can also affect food and water security, increasing risks of food and waterborne diseases such as salmonellosis, cholera, and diarrheal diseases spread in contaminated water sources.
Climate change can also affect the distribution and amount of allergenic plants and pollen, leading to an increase in allergic diseases such as hay fever and asthma.
Impact of Climate-Related Health Issues on Businesses and Economies
Climate-related health issues decrease workers’ ability to perform physical and mental tasks, leading to absenteeism and reduced employee concentration. Morgan Stanley research revealed that over $820 billion is spent yearly on hospitalisations, injuries, medical treatments, mental health conditions, and lost wages linked to air pollution and climate change in the U.S. alone.
By rough estimations, lost labour productivity from wildfire smoke reduced earnings in the U.S. by an average of $125 billion. Extreme heat above 90⁰F leads to a 25% drop in productivity, while at temperatures above 100⁰F, productivity decreases by 70%.
Tourism is one of the industries most affected by climate change and connected health issues. Heatwaves, poor air quality, and the spread of infectious diseases can deter tourists from visiting specific destinations, negatively affecting revenues in the hospitality, entertainment, and transportation sectors.
Meanwhile, increased food insecurity risks can profoundly affect communities and local businesses. Malnutrition impairs the physical and cognitive abilities of both children and adults. Individuals may struggle to perform effectively at work, concentrate or learn something new.
It can also exacerbate existing health conditions and increase healthcare costs for individuals and communities. Families may need to allocate a more significant portion of their income to food purchases, leaving less money for other essential needs and retail spending. Depending on the scale of the problem, low demand may affect certain businesses and local economies as a whole.
Preventative Climate-Health Solutions
There are better strategies than addressing all those issues as they appear. Why wait for something terrible to happen if it can be significantly alleviated or prevented altogether? Preventive measures that mitigate climate impacts on health also help reduce long-term ESG costs.
Investors can help achieve better climate health outcomes by realigning their capital toward preventative measures in the following segments:
- reducing reliance on fossil fuels with the help of renewable energy use, as well as enhanced energy efficiency in buildings, transportation, and industrial facilities;
- developing infrastructure for electric vehicles and alternative fuels;
- implementing sustainable urban planning strategies;
- scaling urban forestry initiatives that increase tree coverage in cities;
- developing cool roof and pavement strategies to reflect sunlight and reduce heat absorption in towns;
- improved forest management programs;
- innovative crop production technologies and regenerative agriculture practices;
- early warning systems and emergency preparedness measures for extreme weather events;
- building seawalls and improving drainage systems;
- watershed restoration, preserving or creating natural coastal defences such as plants, reefs and wetlands;
- building climate-controlled shelters in disaster-prone areas;
- sustainable water management practices;
- water and soil conservation techniques in agriculture;
- irrigation systems, drought-resistant crops, and agricultural diversification;
- upgrading infrastructure for drinking water, wastewater and stormwater management;
- strengthening healthcare systems to address the health impacts of climate change with education and training for healthcare professionals and improved surveillance and monitoring of climate-related health risks;
- climate-proofing health facilities;
- integrate mental health support with climate action solutions.
Investors Role in Mitigation and Prevention of Climate Health Impact
All the abovementioned preventative measures require coordinated efforts from governments, businesses, communities, and individuals to effectively address the interconnected challenges of climate change and public health.
Although introducing initiatives to prevent adverse health effects of climate change largely depends on governments and climate action organisations, even the best ideas can’t develop without solid financial support. That’s where investor money comes in handy.
Public awareness of investing in renewable energy is already high. However, investor support of innovative healthcare solutions addressing climate-related health risks, such as heat stress, vector-borne diseases, and respiratory illnesses, is still nascent. Such support includes investments in healthcare infrastructure, telemedicine, public health education, and medical research on climate change impacts.
The same is true about sustainable urban planning projects and various climate-resilient infrastructures. Flood defences, drought-resistant water systems, agroforestry systems, or precision agriculture technologies are not the most popular investment choices, to be fair.
By profoundly integrating climate-health considerations into their investment strategies, investors can help mitigate climate-related health impacts and promote long-term environmental and social resilience in local communities. Investors who factor in ESG aspects into their investment choices motivate companies to adopt climate-friendly practices and reduce their ecological footprint.
In addition to financing sustainable initiatives, investors can actively engage with publicly traded companies to encourage climate risk disclosure, emission reduction targets, and sustainability initiatives.
The welcome bonus is that sustainable investing positively affects investors’ gains. In 2020, for example, the median total return on equity funds of sustainability-focused companies exceeded that of their peer funds by 4.3%.
Bottom Line
Being an investor is about more than just making money. With financial resources comes the power to make a difference. Climate change and resulting health issues are among the most pressing challenges for modern societies. Reallocating some of your money to prevent massive illnesses and lost labour productivity is one of the best contributions to the local economy and community resilience.
Educate yourself about climate change and how it affects health and safety so that you can concentrate on the essential preventive actions. Encourage the companies you invest in to pursue ESG opportunities at the intersection of climate and health. Even if you can’t provide a significant investment share, participate in crowdfunding projects that address climate resilience. Remember that every small action matters. There are no small contributions when it comes to the common good.
