Wed, 02nd Apr 2025
Climate change is causing sustained increases in global temperatures, and the impacts—including extreme heat, severe storms and greater flooding—are undermining even the world’s best places to do business.
EIU’s latest analysis uses our business environment rankings to introduce the concept of the ‘climate risk gap’, exploring how climate change may disproportionately affect countries with strong business environments. While countries with poorer business environments tend to be more vulnerable to climate change, often for geographical reasons, there are some outliers that face significantly higher climate risks than those of peer economies with similar business environments.
“Some countries, such as Singapore and Denmark, perform highly in our business environment index, but are low-lying, storm-prone or otherwise uniquely vulnerable to climate impacts.” – Prianthi Roy, Europe senior analyst and country forecast manager, EIU
Singapore
Singapore, which EIU considers to have the best business environment in the world, is highly exposed to climate change, yet is also expected to be effective at mitigation. The fiscal cost will be huge, but this figure is dwarfed by the potential hit to growth from climate change without sustained resilience efforts.
Denmark
The risk of climate change affecting Denmark’s infrastructure has risen over the past decade. However, as an affluent Nordic country with an excellent business environment, Denmark is well-placed to enact climate risk mitigation efforts.
EIU’s business environment rankings measure the attractiveness of the business environment in 82 countries and territories, examining 91 indicators spread across 11 different categories. You can download our report to further explore the ‘climate risk gap’, assess your risk exposure and strengthen strategic planning.
The analysis and forecasts presented in this article are drawn from EIU’s Country Analysis service. This comprehensive solution offers essential insights into the political and economic outlook of nearly 200 countries, empowering businesses to manage risks and develop effective strategies.