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In response to stark new warnings that the world will likely warm by more than 1.5° C over the next five years, Henley & Partners in partnership with Deep Knowledge Analytics today launched the Investment Migration Climate Resilience Index — a unique new analytical tool to assess your own country’s climate resilience and explore investment migration program options that offer a pathway to residence rights or citizenship acquisition in more climate resilient locations in return for making a significant investment in the host country’s economy.
The UK’s national meteorological service last week warned that there is now around a fifty–fifty chance that the global temperature will breach 1.5° C between now and 2026, and that it is almost certain that there will be a record warmest year in the same period. Alarming predictions such as these are leading to a significant increase in climate and investment migration to countries and cities where people, assets, and infrastructure are likely to be better protected from the now inevitable impacts of climate change. Using over 900 different data points within 5 parameters, and taking into account key factors of vulnerability, readiness to leverage climate investments, and economic ability to adapt, the innovative new study has produced a Climate Resilience score for 180 countries.
To further assist investors looking to decrease their exposure to high climate risk, the countries have been separated into three resilience bands of higher, medium, and lower resilience. The sobering reality is that of the 180 countries assessed, only 15 are classified as higher resilience, with Climate Resilience scores of 60 or more out of 100. A further 23 are classified as medium resilience, with scores of 45 to 59.9, while the remaining 142 — the vast majority — are all lower resilience, with scores of 44.9 or less. Citizens in countries in the lower resilience band are more at risk from extreme environmental events such as forest fires, hurricanes, heat waves, floods, droughts, and storms. Infrastructure is both weaker and more exposed, and the ability to prepare for and respond to the aftermath of extreme weather events will be lower.
The Investment Migration Climate Resilience Index uniquely combines World Bank GDP data (the average of normalized GDP and GDP per capita for each country) with the University of Notre Dame’s latest Notre Dame Global Adaptation Initiative (ND-GAIN) Country Index, which summarizes countries’ vulnerability to climate change and readiness to convert financial investments (climate finance) into climate adaptation measures. By adding GDP data to the mix, Henley & Partners’ new Global Climate Resilience Ranking incorporates the important consideration of a country’s economic ability to adapt to climate change and protect its citizens against the most adverse effects.
Global North prevails, with US at the top
Unsurprisingly, the top five countries on the Global Climate Resilience Ranking are all in the northern hemisphere. The US ranks 1st, with a Climate Resilience score of 70.6, Germany is close behind in 2nd place, scoring 70.3, the UK is 3rd, with 69.4, Switzerland is 4th, scoring 68.4, and Canada is in 5th place by a narrow margin, with a score of 68.3. Even less surprisingly, at the other end of ranking, six Sub-Saharan countries occupy the bottom five positions. The Democratic Republic of the Congo and Sudan jointly hold the 132nd position, both with a score of 22.0, Guinea-Bissau ranks 133rd, scoring 21.4, Eritrea is 134th, with 20.8, Central African Republic is in 135th position, with a score of 19.3, and the world’s least climate resilient country is Chad, in 136th place, with a score of just 19.1 out of 100. The irony barely needs to be pointed out. It is an established fact that Sub-Saharan Africa has contributed the least to global warming, yet Africa will suffer the most devastating impacts of climate change while also being home to many of the least resilient countries.
CEO of Henley & Partners Dr. Juerg Steffen says these imbalances will inevitably see the redistribution of the world’s population as the climate crisis deepens and while, ultimately, everywhere will be impacted by climate change to a certain extent, the countries and cities that proactively organize themselves by preparing for what lies ahead are the ones to look out for. “If any good news can be taken from these bleak results, it is that there are fifteen countries hosting formal investment migration programs that are classified as higher or medium resilience, giving global investors alternative residence or citizenship options to choose from if they find themselves in a lower resilience location. By investing in a more climate resilient country, investors gain the right to relocate their families, their assets, and critical infrastructure to a more resilient place that will be able to better withstand future climate shocks.”
The significance of resilience versus vulnerability
Importantly, Henley & Partners’ Global Climate Resilience Ranking focuses on resilience to climate change rather than on vulnerability alone. Climate resilience is an overall measure that helps to indicate how well positioned a country is to adapt to climate change and what it is able to do about mitigating its impact. The measure of vulnerability included in the study indicates a country’s physical exposure, the sensitivity of key sectors to climate impacts, and its adaptive capacity in terms of infrastructure and social resources in place. Resilience goes further by combining this measure of vulnerability with readiness as well as a country’s economic ability to adapt.
Charles Phillips, independent researcher and consultant for Oxford Business Group, says it is interesting to compare the US’s top position on the Global Climate Resilience Ranking to its place on the latest ND-GAIN Country Index, where it ranks 19th with a score that just measures vulnerability and readiness. “When considering economic wealth alongside these two variables, the US is boosted into 1st place globally. This shows that while the US does not rank highest in the ND-Gain Country Index in terms of lowest vulnerability (it ranks 25th) or readiness (it ranks 19th), its significant economic wealth as indicated by its GDP makes it well placed to adapt to inevitable changes in climate as needed. When weighing the three factors equally, the US achieves the highest Climate Resilience score overall.”
Dominic Volek, Group Head of Private Clients at Henley & Partners, says climate change concerns are rising sharply on the agendas of most international investors, business owners, and entrepreneurs. “Climate change is already impacting, and will certainly do so increasingly in the future, on virtually all businesses and on all aspects of our lives. No one should be planning for the long term without considering the climate change factor. The countries and cities that are most resilient to climate change will attract global talent and investors in search of ‘climate havens’ that have prepared for what lies ahead.”
Commenting in the Henley & Partners’ study, Dr. Parag Khanna, the Founder and Managing Partner of FutureMap, advises investors to be led by data when considering which assets to dispose of, where to increase exposure, and appropriate time horizons to invest for. “They should look closely at the immigration policies, investment regulations, and other characteristics of potential destinations for themselves and for their capital. These strategies together are the playbook to generate higher yield despite the many potential climate, political, and economic scenarios with which we must currently grapple.”
Seven higher resilience investment migration options
Out of just fifteen countries globally that are classified as higher resilience, seven host investment migration programs. The US, in top spot overall, has a highly sought-after investment migration option, the US EB-5 Immigrant Investor Program. Another economic powerhouse, the UK ranks 3rd globally, having led the climate action charge for years. It was the first country worldwide to establish a framework to cut carbon emissions and adapt to climate change, and its UK Tier 1 Innovator Visa is an excellent option for entrepreneurs seeking a climate resilient base.
Small but steady Switzerland ranks 4th globally, with excellent infrastructure and innovative green technology enhancing its ability to adapt to a changing climate. The Swiss Residence Program, which Henley & Partners designed for non-EU and non-EFTA nationals, provides a gateway to this highly desirable country that offers political, social, and economic stability. Canada is in 5th place globally, and its relatively high latitude means certain industries such as agriculture may even benefit from rising temperatures. One of several ways to become a permanent resident in Canada is via its Start-Up Visa Program.
Australia is the only southern hemisphere investment migration country in the higher resilience band, ranking 8th globally, with a score of 67.5. The country recently announced a new National Climate Resilience and Adaptation Strategy to protect its assets and generate economic opportunities more effectively in a changing climate. Australia offers numerous investment migration options, including four visa streams under the Business Innovation and Investment Program, with a minimum contribution of AUD 2.5 million under the Investor Stream.
Another European gem is Luxembourg, ranking 11th, with a score of 63.3. As the EU country with the highest per-capita GDP, Luxembourg is well resourced for addressing climate change. The Luxembourg Residence by Investment Program has a minimum investment requirement of EUR 500,000, and after five years of continuous residence, investors can apply for citizenship, thereby gaining a passport to this EU nation.
Italy is in 13th place overall, scoring 61.5. As the eurozone’s third-largest economy, Italy aims to become a climate resilient society, fully adapted to the impacts of climate change, by 2050. The Italy Residence by Investment Program is designed for foreign investors committed to making a contribution to the country’s economy ranging from EUR 250,000 to EUR 2 million, granting Italian residence and visa-free access to Europe’s Schengen Area. Under special conditions, citizenship may be granted after 10 years of residence.
Eight investment migration programs in medium resilience countries
Singapore ranks 16th globally, with a score of 59.5. The wealthy, technology-driven city-state is investing heavily to prepare for climate change impacts. Foreign nationals may apply for permanent residence through the Singapore Global Investor Program. Ireland, in 17th place overall, with a score of 59.4, has a climate adaptation strategy to reduce vulnerability to as well as to capitalize on any positive impacts of climate change. An EU member, Ireland has one of Europe’s fastest growing economies, and its Immigrant Investor Program offers four options, with the minimum investment requirement being an endowment of EUR 500,000.
Stable Austria ranks 18th globally, with a score of 59.0, and is the only Western European country that offers the possibility of acquiring citizenship by investment and an EU passport without prior residence requirements. Austria Citizenship by Investment requires a substantial contribution, such as a joint venture or business investment and offers the right to reside anywhere in the EU and Switzerland. In 19th place globally, with a score of 58.7, is Spain, one of Europe’s first countries to develop a climate adaptation policy. Under the Spain Residence by Investment Program, for a minimum real estate investment of EUR 500,000, investors and their immediate family can become residents in less than a month. Subject to general immigration rules and requirements, they can acquire permanent residence status after five years of continuous residence and may gain Spanish citizenship thereafter.
New Zealand ranks 23rd globally, with a score of 55.8. The dual island nation recently revealed plans to prepare for climate catastrophes. Investors can apply for the New Zealand Residence by Investment Program by making a minimum contribution of NZD 3 million, held for four years. The UAE is in 26th place, with a score of 49.6. The country has the economic wealth to adapt to climate change and is already doing so. The UAE’s new visa rules will come into effect in September 2022, including the expansion of its Golden Visa offering.
The last of the six EU investment migration countries in the medium and higher resilience bands is Portugal, in 30th place overall, with a score of 47.6. Portugal’s first climate adaptation plan covers the years to 2030. The Portugal Golden Residence Permit Program is a five-year residence by investment program for non-EU nationals that gives the right to live, work, and study in Portugal and allows free circulation in Europe’s Schengen Area. And finally, the 15th investment migration country in the medium and higher resilience bands is transcontinental Turkey, which ranks 34th globally and scores 46.2. The country is updating its climate change adaptation strategy and action plan that has been in place since 2011. The Turkey Citizenship by Investment Program offers several investment pathways, with the minimum investment currently USD 250,000 in real estate, but this is likely to rise to USD 400,000 in the near future.
Citizenship matters when it comes to climate risk
As the Henley Global Mobility Report Q2 revealed, there are close correlations between a country’s ability to adapt to climate change and its passport strength. In future, where localized adaptation to climate change is not possible, there will be no choice but to relocate either within countries or to more resilient countries.
“Climate change will continue to be a massive driver of human migration for the foreseeable future,” concludes Dr. Steffen. “This raises a crucial question for investors who are proactively looking to build future-ready climate resilient portfolios: Where are the optimal places to relocate to, or invest and grow your business in, if you want to lower your risk when it comes to the impact of climate disasters? As our new Investment Migration Climate Resilience Index reveals, there is a range of residence and citizenship by investment programs available, each providing a trusted mechanism for accessing more climate resilient locations.”
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Notes to Editors
About Henley & Partners
Henley & Partners is the global leader in residence and citizenship by investment. Each year, hundreds of wealthy individuals and their advisors rely on our expertise and experience in this area. The firm’s highly qualified professionals work together as one team in over 35 offices worldwide.
The concept of residence and citizenship planning was created by Henley & Partners in the 1990s. As globalization has expanded, residence and citizenship have become topics of significant interest among the increasing number of internationally mobile entrepreneurs and investors whom we proudly serve every day.
The firm also runs a leading government advisory practice that has raised more than USD 10 billion in foreign direct investment. Trusted by governments, the firm has been involved in strategic consulting and in the design, set-up, and operation of the world’s most successful residence and citizenship programs.
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