Vulnerability a key driver of emerging-world climate policy commitments, states new WTW analysis
WTW has released a new analysis identifying climate policy commitment among 62 nations, highlighting that countries most vulnerable to climate change, such as Bangladesh, Malaysia, and Senegal, show the strongest dedication to climate objectives. The findings are based on WTW's Political Risk Index, where effective government and vulnerability significantly influence climate commitment. The report emphasizes that understanding climate-related risks is vital for investors, especially as nations dependent on fossil fuels exhibit weaker prioritization of climate policies.
- Countries like Bangladesh, Malaysia, Philippines, Chile, and Senegal show strong commitment to climate policy.
- Emerging countries in Africa and Asia demonstrate effective governance with successful climate strategies.
- The report can serve as a guide for investors looking to understand political risk related to climate change.
- Countries reliant on fossil fuel income show lesser commitment to climate policies.
- Vulnerable nations face challenges like food insecurity, which could complicate investment climates.
Africa and Asia lead the emerging world on ‘commitment on climate’
LONDON, June 28, 2022 (GLOBE NEWSWIRE) -- Commitment on climate policy in the emerging world is strongest in countries most vulnerable to the impacts of global warming and in those with effective governments, but weakest in those reliant on fossil-fuel income, according to new analysis by Oxford Analytica and WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company.
Of 62 nations and territories assessed in the WTW Political Risk Index, the governments of Bangladesh, Malaysia, the Philippines, Chile, and Senegal are most strongly committed to prioritising climate when making public policy. Each of these countries ranked four on WTW’s one-to-five scale, where countries that rank only one (Libya, Turkmenistan, and Myanmar) assign little to no weight to climate objectives, and those that rank five (none of the 62) prioritise climate above other key policy objectives. The remaining countries were seen, at best, to give equal weight to combatting climate change and other key public policy goals.
“Climate has always been a driver of political risk,” said Stuart Ashworth, managing director and head of political risk for corporates at WTW, “and in extreme cases food and water are being weaponized for political reasons. Understanding a country’s vulnerability to climate shocks will be increasingly important for investors. In Mali, Niger, and Burkina Faso, for instance, erratic weather patterns and rising global food prices are contributing to food insecurity in regions already prone to violence.”
New statistical research by WTW identified three factors that correlate significantly with the subjective ratings assigned:
- Vulnerability. Governments in emerging-world countries with greater vulnerability to the impacts of climate change appear to show greater commitment to policies such as emissions reduction
- State capacity. Countries with a more effective civil service also appear to show greater commitment to climate policy
- Oil and gas income. Countries that earn more from fossil fuels appear to show lesser commitment to climate policy
Looking across world regions, governments in Africa and Asia lead the emerging world on climate commitment. Many Asian countries have a comparative strength in government effectiveness. On a regional average basis, Asian countries tend to have strong policymaking practices and effective bureaucracies capable of carrying out political goals. Exemplars are Malaysia and China, which rated highly on the strength of their well-developed climate transformation plans.
Expert ratings for many countries in Africa came in above statistical predictions, including Cameroon, Central African Republic, the DRC, Ethiopia, Morocco, Mozambique, Uganda, and top-rated Senegal. Sam Wilkin, Director of Political Risk Analytics, WTW, said, “The novel ‘green development’ approaches being pursued by many African countries could serve as a model for the rest of the world.”
Download the complete analysis in the WTW Political Risk Index.
About WTW
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Learn more at wtwco.com
Media contact
Hannah Stewart
wtw@haggie.co.uk
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