The expanding size and prosperity of the global population is leading to rapidly rising consumption and putting unsustainable pressures on the world’s most critical natural resources.
Even basic commodities such as water are now in increasingly short supply, providing the spur for the development of new markets, technologies and investments on the one side and the potential for unrest, commercial disruption and protectionist behaviour on the other. The growing shortages of resources will be exacerbated by climate change, heightening catastrophe risk and putting further pressure on land, water supplies and food production.
Model simulations of global warming by the Intergovernmental Panel on Climate Change
Possible climate impact of a rise in global temperatures
Energy usage is expected to increase by 30% and water withdrawals by 50% by 2030.
Water stress is often localised. For example, within the high population areas of the North China Plain, aquifers have depleted significantly. The North China Plain is home to around 10% of China’s population and includes the cities of Beijing and Tianjin.
Pressure on natural resources and the impact of climate change will have a fundamental impact on the way people live and companies do business.
These environmental and economic threats are going to be key drivers of government policy over the coming decades. They’re also going to reshape risk profiles and investment priorities across all industries, including financial services.
At the same time, these developments will open up new markets for businesses that understand the changing dynamics of supply and demand, and know how to mitigate the risks.
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Global Leader Financial Services
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Q: Do financial institutions need to do more to actively manage their business around the war for natural resources?
There is an immediate imperative for financial institutions to be more proactive around this issue
There’s no need for financial institutional to do any more than they currently