Financial services: climate-health risks don’t yet feature in strategic conversations

“Initially, climate risk was driven by regulators requiring financial services companies to think about it in their portfolios,” says Tim Waddell, Chapter Zero Fellow and portfolio Non-executive Director in the financial services industry. “Now it has shifted from being a regulatory risk to being a business opportunity.”

Do climate-driven health risks feature in those discussions too? “No,” says Waddell. “The only way they would feature is if an equity analyst was looking at a sector or specific company and one of the calculations involves health risks related to climate – but that is a second order discussion.”

Patricia Rodrigues Jenner, Chapter Zero Fellow and global Non-Executive Board Director, concurs and points out that short investment horizons limit climate-health prominence across much of financial services. “Climate-related health risks feel too distant and diffuse to drive board-level action, even where underlying climate exposure is acknowledged,” she says.

Specificity and product relevance are what drive board engagement. “Flood risk, as well other acute risks such as drought, fires and air pollution, are now taken seriously, even if not everybody is going to be affected by all these,” says Rodrigues Jenner. “This is because flooding, droughts, fires, pollution, as concepts are concrete and tied to specific products and geographies.”

She adds that rather than being discussed as a direct health risk, climate change enters board discussions primarily through its impact on mortality assumptions. The mortality curve is modelled using Intergovernmental Panel on Climate Change (IPCC) socioeconomic scenarios.

“Under current IPCC scenarios, material climate-related mortality impacts in the UK are not expected within a 30–40-year horizon and therefore do not register as an immediate concern for UK-focused financial liabilities,” she says. “It is more effective to flag climate health risk where it is specific and material (for example, by geography or product line) rather than making broad reassuring statements.” Impacts are already relevant through, e.g. heat stress, air quality, disrupted care and localised insurance losses.

Rodrigues Jenner points out that socio-economic deprivation will amplify climate-health impacts when they arrive. “Lower socioeconomic bands are more likely to be subject to problems and existing inequalities will compound exposure to climate-related health harms, even if this is not yet systematically integrated into financial risk modelling,” she says. As others have stated before, “climate change takes longer than expected but impacts will happen faster than one can imagine”.

Climate-health risks are starting to land

Mark Manning, Chapter Zero Fellow and Sustainable Finance Advisor, points out that we are now starting to see institutional commentary on climate-health risks. Early in 2026, the World Economic Forum flagged climate-health as being “underpriced and underappreciated”. The Institute and Faculty of Actuaries has also highlighted how warming can trigger cascading effects through the economy and society, including the spread of infectious diseases, he adds.

“Concrete case studies are starting to bring the climate-health story home, and product innovation is occurring in the finance sector – notably in the insurance sector. For instance, parametric insurance products are emerging that pay out when extreme heat triggers are breached, compensating for lost work days,” says Manning.

Waddell adds that insurance is the most obvious area of financial services where climate-health risks land commercially, both as a pricing input and as a growth opportunity.

“For banks and asset managers, the lens is the portfolio rather than own operations,” he reminds us. “It’s about financial services companies assessing climate risk inherent in their portfolio of assets…associated with companies the financial firm is lending to or insuring."

Getting back to the underlying human factors

Let’s not forget that climate-health risks address the human aspects of climate change and the impact those risks have on business. Waddell points out it will be interesting to watch where on the virtue versus value-chain this will land given that climate-health risks only become a board issue once they have clear economic consequences.

For Manning, policy engagement should be front and centre. He points out that government regulation can change the trajectory of the transition and help avoid the most catastrophic outcomes in relation to climate generally, and climate-health risks more specifically.

For now, the harsh reality is that investor and bank engagement in climate-health risks are still limited, with only early indications of climate-health risks showing up in mainstream financial commentary.