Skip to content
HSBC LogoHSBC Logo
Back to Insights
  • Sustainability
    • Understanding ESG
    • Environmental

Fragile Planet 2022

By Wai-Shin Chan, Head of ESG Research

Article

  • Article

Scoring climate risks: who is the most resilient?

A successful response to the climate crisis requires urgent action on a global scale, and all countries are affected. But some will fare better than others. Understanding the different risks and opportunities that countries face can inform better decisions by policymakers and investors alike.

In our latest ‘Fragile Planet’ report – the seventh in the series – we examine a sample of 77 countries to understand which are more resilient, and which more vulnerable, in the face of rising climate risks. We base our assessment on four categories of indicator:

  • Transition risks; how embedded carbon is in national economies
  • Physical risks; impacts such as rising sea levels, desertification, and more frequent extreme weather events
  • Governance; the policy, institutional quality, and financial strength needed to respond to climate risks
  • Green opportunities; how countries are placed to make economic profit from cleantech as the world decarbonises
Resilience - key indicators infographic

The most resilient countries overall are wealthy European nations, according to our rankings. Sweden leads, as it did last year, followed by Finland, Norway, France and Denmark. The highest placed non-European nation is the US, which ranks seventh.

The other end of the country ranking is dominated by emerging market and frontier market nations, with African, Middle Eastern and South East Asian nations particularly vulnerable, albeit for different reasons.

But we think it’s important to go beyond the overall rankings and dig into the details. For instance, while emerging and frontier nations tend to be more vulnerable overall, emerging market countries such as Chile and China are ranked ahead of developed nations including Spain and Italy.

China is ranked relatively highly in part because no other nation is better placed to make economic profit from cleantech as the world decarbonises, according to our analysis. China has significant reserves and production shares of a number of key minerals used to make low-carbon technology such as electric batteries, solar panels and light-emitting diodes - and also has strong industrial potential to produce clean technology. Indonesia also holds significant reserves of key commodities, while other Asian nations including India and Japan have the potential to benefit from cleantech more broadly.

A further nuance underlined by our analysis is that relatively resilient regions still face acute climate risks in certain areas. Europe is particularly exposed to rising temperatures. Of the 20 countries experiencing the largest increases in temperature in our sample set over recent years, 19 are European. The average temperature in the Czech Republic for the decade 2011-20 was 0.85˚C higher than for the period 2001-2010.

Even highly-ranked nations also contend with their own idiosyncratic challenges. The US, for instance, is one of the 10 most vulnerable markets when it comes to the number of people affected and inflation-adjusted dollar damage costs associated with extreme weather events in the past decade. There was a 300% rise in the number of people affected by extreme events in the country during the period 2012-21, compared with 2002-11.

Overall, our analysis underlines the need for urgent climate action. Further technological innovation, economic support and policy delivery far beyond present levels are vital to achieve lasting cuts in global carbon emissions as well as prepare for rising temperatures and related consequences. Some countries need to prioritise climate mitigation, while for others adaptation is critical, given their exposure to physical climate impacts.

However, the potential opportunities should not be underestimated either. Those countries and companies who act quickly and radically have the potential to better protect society, build resilience, and profit from a transition to cleaner, low-carbon technology. We hope our analysis will help investors better understand the nuances of the climate risks and opportunities that lie ahead.

First published 27th March 2022.

Would you like to find out more? Click here to read the full report (you must be a subscriber to HSBC Global Research).

The following analyst(s), who is(are) primarily responsible for this document, certifies(y) that the opinion(s), views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Wai-Shin Chan, CFA, Lucy Acton, CFA, Amit Shrivastava, Paul Bloxham, Charles Swabey and Jamie Culling

This document has been issued by The Hongkong and Shanghai Banking Corporation Limited, which has based this document on information obtained from sources it believes to be reliable but which it has not independently verified. Neither The Hongkong and Shanghai Banking Corporation Limited nor any member of its group companies (“HSBC”) make any guarantee, representation or warranty nor accept any responsibility or liability as to the accuracy or completeness of this document and is not responsible for errors of transmision of factual or analytical data, nor is HSBC liable for damages arising out of any person’s reliance on this information. The information and opinions contained within the report are based upon publicly available information at the time of publication, represent the present judgment of HSBC and are subject to change without notice.

This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe for any investment or other investment products mentioned in it and/or to participate in any trading strategy. It does not constitute a prospectus or other offering document. Information in this document is general and should not be construed as personal advice, given it has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Accordingly, investors should, before acting on it, consider the appropriateness of the information, having regard to their objectives, financial situation and needs. If necessary, seek professional investment and tax advice.

The decision and responsibility on whether or not to purchase, subscribe or sell (as applicable) must be taken by the investor. In no event will any member of the HSBC group be liable to the recipient for any direct or indirect or any other damages of any kind arising from or in connection with reliance on any information and materials herein.

Past performance is not necessarily a guide to future performance. The value of any investment or income may go down as well as up and you may not get back the full amount invested. Where an investment is denominated in a currency other than the local currency of the recipient of the research report, changes in the exchange rates may have an adverse effect on the value, price or income of that investment. In case of investments for which there is no recognised market it may be difficult for investors to sell their investments or to obtain reliable information about its value or the extent of the risk to which it is exposed. Some of the statements contained in this document may be considered forward looking statements which provide current expectations or forecasts of future events. Such forward looking statements are not guarantees of future performance or events and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements as a result of various factors.

This document is for information purposes only and may not be redistributed or passed on, directly or indirectly, to any other person, in whole or in part, for any purpose. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. By accepting this report, you agree to be bound by the foregoing instructions. If this report is received by a customer of an affiliate of HSBC, its provision to the recipient is subject to the terms of business in place between the recipient and such affiliate. The document is intended to be distributed in its entirety. Unless governing law permits otherwise, you must contact a HSBC Group member in your home jurisdiction if you wish to use HSBC Group services in effecting a transaction in any investment mentioned in this document.

Certain investment products mentioned in this document may not be eligible for sale in some states or countries, and they may not be suitable for all types of investors. Investors should consult with their HSBC representative regarding the suitability of the investment products mentioned in this document.

HSBC and/or its officers, directors and employees may have positions in any securities in companies mentioned in this document. HSBC may act as market maker or may have assumed an underwriting commitment in the securities of companies discussed in this document (or in related investments), may sell or buy securities and may also perform or seek to perform investment banking or underwriting services for or relating to those companies and may also be represented on the supervisory board or any other committee of those companies.

HSBC will from time to time sell to and buy from customers the securities/instruments (including derivatives) of companies covered in HSBC Research on a principal or agency basis.

From time to time research analysts conduct site visits of covered issuers. HSBC policies prohibit research analysts from accepting payment or reimbursement for travel expenses from the issuer for such visits.

Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking, sales & trading, and principal trading revenues.

Whether, or in what time frame, an update of this analysis will be published is not determined in advance.

For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research.

The Hongkong and Shanghai Banking Corporation Limited is regulated by the Hong Kong Monetary Authority. If it is received by a customer of an affiliate of HSBC, its provision to the recipient is subject to the terms of business in place between the recipient and such affiliate.

Additional disclosures

  1. This report is dated as at 27 March 2022.
  2. All market data included in this report are dated as at close 25 March 2022, unless a different date and/or a specific time of day is indicated in the report.
  3. HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its Research business. HSBC's analysts and its other staff who are involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier procedures are in place between the Investment Banking, Principal Trading, and Research businesses to ensure that any confidential and/or price sensitive information is handled in an appropriate manner.
  4. You are not permitted to use, for reference, any data in this document for the purpose of (i) determining the interest payable, or other sums due, under loan agreements or under other financial contracts or instruments, (ii) determining the price at which a financial instrument may be bought or sold or traded or redeemed, or the value of a financial instrument, and/or (iii) measuring the performance of a financial instrument or of an investment fund.

© Copyright 2022, The Hongkong and Shanghai Banking Corporation Limited, ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of insert issuing entity name. MCI (P) 037/01/2022, MCI (P) 017/10/2021

Global Research

HSBC Global Research provides information, insights and thought-provoking ideas.
Read more
  • Sustainability
    • Understanding ESG
    • Environmental

Need help?

For more information, please contact your HSBC representative.