You’d have to be Rip Van Winkle to be unaware of the suffering and costs from this summer’s heat waves, wildfires, and severe weather events. Fortunately, the financial and retirement industries are galvanizing to help address and mitigate the financial and health consequences for everybody—and seniors and retirees are particularly vulnerable.
Consider these conclusions from diverse and respected sources warning of the risk of climate change
- “Climate Change and You” was the cover story of the June 2021 issue of the AARP Bulletin. It summarized the challenges that climate change poses for older Americans and shared tips for protecting their lives and finances. The Bulletin is read by more than 30 million people and is in the top two of readership in the U.S. along with its sister publication, AARP Magazine.
- “Climate risk is investment risk” was a large heading in Larry Fink’s 2022 letter to CEOs of Blackrock clients. He is the CEO of Blackrock, the world’s largest investment management firm with more than $10 trillion in assets under management, including the nation’s largest 401(k) plans. His letter goes on to say that cities and countries that don’t plan for a carbon-free future risked being left behind.
- “The combination of age, chronic conditions and disability in an extreme weather event can be lethal” is the warning of an article written by Joe Coughlin, director of the MIT AgeLab. His article appeared in the July 2022 issue of Generations magazine published by the American Society on Aging. His story cites a forecast that “…portends more extreme weather events affecting everyone, but likely putting the well-being and economic security of older adults at greatest risk.”
- An October 2021 article from giant insurance company Swiss Re states, “It is clear that climate change is no longer some distant future threat but that it is here today.” The article headline? “It’s time to take action on climate change.”
- “Climate change poses the biggest long-term threat of our time, impacting not only how we live but also how we invest,” according to a recent report titled Investing in Times of Climate Change 2022. This report was published by Morningstar, the influential financial services firms that many financial advisors rely on to analyze mutual funds, ETFs, and individual stocks.
- Morningstar presents evidence that investment returns of corporations with the highest ESG ratings (measuring environmental, social, and governance factors) outperformed the general stock market by more than 8% in 2021, in a report titled Why Sustainable Strategies Outperformed in 2021.
Moving beyond the financial and retirement industries, the United Nations 2022 report on the climate issued a clear warning: “It’s ‘now or never’ to limit global warming to 1.5 degrees.”
And let’s not forget Pope Francis, who has called on world leaders to provide “effective responses” to the environment emergency and offer “concrete hope” to future generations.
What can you do?
It might be natural to wonder what seniors and retirees can do about these disturbing conclusions. Well, there’s a lot you can do. You can investigate how to adapt your life to climate risks and severe weather events with respect to your home, community, transportation, nutrition, and buying habits. You can review your investments and financial resources to determine if you need to reposition your finances to be more resilient to climate change. And some of you might pursue activism to help your children and grandchildren inherit a better world.
With the climate and retirement challenges we face, we’ll need all hands on deck. It’s reassuring to know that the establishment is getting on board.
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