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1/3 of people globally facing imminent financial ruin upon losing their income

New report by Lloyd’s Register Foundation shows financial insecurity undermines resilience in the face of climate change-related disasters.

A new report launched by a global safety charity has highlighted that people’s ability to withstand the impact of climate change-related disasters is being undermined by a lack of financial resilience.

More than one third (34%) of people across the world said they could only cover their basic needs for less than a month if they lost all their income, including more than one in 10 (12%) who say they could only cover their basic needs for less than a week. According to the Poll, people are most likely to struggle in Southern Asia (57% could only cover their basic needs for less than a month, including 26% for less than a week) and Northern Africa (49% less than a month, including 24% less than a week).

The statistics come from the latest report from the Lloyd’s Register Foundation World Risk Poll, powered by Gallup. A Resilient World? Understanding vulnerability in a changing climatepresents data from over 125,000 people in 121 countries, revealing how people feel their communities and their country’s infrastructure and government can cope in the face of disasters.

The Poll found that more than a quarter (27%) of the world’s population has experienced some type of disaster in the past five years, with the most common form of disaster – those caused by flooding or heavy rain – experienced by one in 10 people worldwide (10%). Now, with climate change-related disasters increasing across the world, illustrated most recently by the widespread floods in Pakistan, the Poll’s findings highlight a need for policymakers to work together to ensure people are supported in the event of a crisis.

Dr Sarah Cumbers, Director of Evidence and Insight at Lloyd’s Register Foundation, said: “Financial security is a crucial aspect of resilience. When people are exposed to a shock or stressor – such as a global recession or a disaster caused by a natural hazard – it can deprive them of their livelihoods. We saw this with the Covid-19 pandemic, when many were forced into unemployment. The results of the Poll show just how vulnerable people across the world are, making financial support key to improving resilience as climate-related crises become more frequent and more severe.”

Regions with better infrastructure and economic security typically score higher on the World Risk Poll Resilience Index. This tool calculates how equipped people around the world are to handle adversity, based on their personal circumstances and perceptions of support.

According to the Resilience Index, the top scoring regions – Australia/New Zealand and Northern America – have better-developed infrastructure and higher levels of economic security. The least resilient region, according to the Index, is Central/West Africa – the region where people are also most likely to say they have experienced a disaster caused by flooding, at almost two in five (17%).

Despite this, findings from the World Risk Poll show how lower-income regions are more resilient in some ways, such as having a higher sense of community support when dealing with a disaster. While less than a quarter (23%) of people worldwide believed their neighbours care about them ‘a lot’, this indicator of community support was higher among residents of low-income countries (35%) compared to high-income countries (20%).

When asked whether people have a plan that all family members know about in the face of a disaster, people in the Philippines (86%), Cambodia (81%) and Vietnam (70%) were most prepared. Indeed, seven of the 14 countries where more than half (50%) of people have a plan are in South-eastern Asia, partly explaining why the region bucks the global trend and scores highly (third place) on the World Risk Roll Resilience Index despite being primarily made up of lower-middle-income countries. This is also despite, or perhaps because of, being among the global regions most prone to natural hazards.

However, the data also reveals that those in low-income countries have lower confidence in their ability to protect themselves and their families from a disaster – only two in five (40%) say there is anything they could do, compared with three in five (61%) in high-income countries. This is linked with their satisfaction with local infrastructures, such as healthcare services and internet access. For example, barely more than a quarter (27%) of people in low-income countries say they have internet access, compared to more than nine in 10 (91%) in high-income countries, denying people a crucial lifeline by which to receive disaster warnings and instructions. In all country income groups, people with internet access were more likely to say they could protect themselves in the event of a disaster.

Dr Cumbers added: “As well as measuring people’s perceptions and experiences of different safety risks, the World Risk Poll is designed to provide global insights into how resilient people are in different social, economic and geographical contexts. While the Resilience Index shows us that those in higher income regions are typically more resilient to disasters, including those caused by climate change, it also highlights resilience strengths in other regions that can be learnt from and built on with appropriate investment

“As the effects of climate change continue to make headlines, we need to invest in equitable resilience that protects people from severe weather and other hazards, no matter who they are or where they live. It is a critical vulnerability that so many people around the world would be left financially exposed in the event of a disaster, and so this report should prompt policymakers, development agencies and technical experts to work together to develop strategies to help populations cope with large-scale hazards.”

Funding is available from Lloyd’s Register Foundation for further research and interventions using World Risk Poll data to reduce risk and improve resilience. To find out more, visit the World Risk Poll website.

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