Executive Summary

  • We rank 67 developed, emerging, and frontier market countries for their vulnerability to climate change risks
  • Physical impacts, transition to low-carbon economies and the funds to respond to climate change are all key to this analysis
  • India and other South and South-East Asian states are the most vulnerable to climate risks overall

Climate risk exposure

All countries are being impacted by climate change but some are facing much more acute challenges than others. So we are returning to a theme we have addressed before: identifying and scoring the countries that are most exposed to climate change risks, as well as those best placed to respond to them.

Climate change manifests through rising temperatures, can alter hydrological (water) cycles and exacerbates extreme weather events. In turn this means higher risks to energy, food and water systems, populations and the global economy. Over 2030 to 2050, the World Health Organisation (WHO) expects 250,000 additional deaths per year due to climate change.

Furthermore, as the world seeks to limit climate change, we believe a combination of climate policy and disruptive cleaner technologies, which do not use fossil fuels (particularly in the power and transport sectors), mean that the peak for fossil fuel demand may arrive in the coming years. In this report, we look at which countries are most vulnerable to climate change – in terms of both the physical impacts and the associated energy transition risks – and which are better placed to respond to these pressures.

Our key findings are as follows: India, followed by Pakistan and the Philippines, are the most vulnerable countries to climate change. South and South-East Asian countries account for five of the ten most vulnerable countries. Countries from the Middle East, Latin America and Africa are also in this group. The full rankings can be found on page 5.

Developed market countries in general rank better, with Israel (12th) the most vulnerable DM country and Australia next at 29th. Finland, Sweden and Norway, followed by Estonia and New Zealand, are the five least vulnerable countries. The world map on page 2 picks out more of our key findings.

What we’ve done in this report

This is our most comprehensive assessment yet. In our last analysis, Scoring Climate Risk, 23 March 2016, we only looked at the G20 countries. This time, in response to client demand, we have broadened our coverage to all countries in the MSCI Developed, Emerging and Frontier Market definitions (except for Hong Kong and Taiwan, where some key data gaps would have skewed our rankings). The 67 countries now captured represent almost one-third of the world’s nation states, but 80% of the global population and 94% of global GDP.

Read the full report in PDF format