29 January 2020

All nations need to address the rising climate risks but some are more vulnerable than others. We’ve looked at 67 developed, emerging and frontier market countries and ranked them on their resilience.

Finland tops the league, but this is a complex exercise. We’ve taken 35 indicators and explored them through 54 data points for each country. Nations strong in one area can be weak on others.

Some countries have the policies, the institutions, financial strength and an informed population that can respond to climate change. Others are at greater risk from the physical impacts of global warming. Some have carbon embedded in their economies, while others are better placed to profit from clean technologies.

Carbon intensity varies hugely between countries.

Finland tops the league

Switzerland is best placed because it has few fossil-fuel industries and utilises hydroelectric power. France, with its heavy dependence on nuclear energy, is second, followed by Romania, another economy using hydro power rather than coal.

At the bottom of that list are countries dependent on their oil and gas reserves for both domestic energy and exports.

The world is seeing the impact of climate – whether floods in Indonesia or bushfires in Australia – daily. Middle East and North African countries are the hottest and driest but Eastern Europe – Hungary, Serbia and Romania – has seen temperatures rise fastest recently.

ESG research

HSBC analysts specialising in Environmental, Social and Governance (ESG) issues such as climate change and future cities are among the leaders in their industry.

HSBC Global Research was rated number one for socially responsible investment and sustainability research by independent evaluators Extel in 2019.

Find out more about Global Research on the HSBC Global Banking and Markets site (opens in new window)

Wealthy European nations have proved least vulnerable to climate risks, with Sweden just ahead of Finland and Norway, followed by the UK and France. Extreme weather events linked to global warming push the US down to 61st on this list, but most vulnerable on these criteria is Nigeria, followed by Egypt, Pakistan, Saudi Arabia and India.

Norway tops our ranking for having the policies and governance to address climate risks: it has a strong sovereign wealth fund, effective administration and a free press. It is followed by the other Nordic countries and Switzerland. Most vulnerable is Kenya, with low earnings and poor education, then Egypt, Pakistan, Bangladesh and Nigeria.

But climate change presents opportunities as well as problems. We think the potential revenues from its clean-tech companies means China has most to gain – even more than the US, which vies on innovation with Japan for registering patents.

Germany, Portugal and Finland are other relative winners but several fossil-rich economies currently have no public companies earning climate revenues.

Balancing those four scores leaves Finland with the overall greatest resilience to climate change, ahead of Sweden, Germany, Denmark and the US. Bottom of the table is Nigeria.

However, climate change poses risks to all countries. The 2020s are a crucial decade and international policy-making has looked increasingly detached from scientific evidence in many countries.

Yet, despite political headwinds in some countries and disappointingly slow progress at the 2019 global climate conference in Madrid, we think the world is increasingly focused on climate change. Encouragingly, the improving economics of clean alternatives to fossil fuels allow rapid deployment in many countries.

This research was first published on 20 January 2020.

Disclosure and disclaimer

Analyst Certification

The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, 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: Ashim Paun

Important disclosures

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  1. This report is dated as at 20 January 2020.
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