The report found that the global middle class – equating to more than a billion people – is particularly exposed to the effects of climate change thanks to relatively large investments in property. The middle class also has unique political influence, UBS said, and the power to inspire legislative action on climate change.

UBS Investment Bank managing director Paul Donovan explained: “The middle class has two important qualities that make them critically important to the conversation about climate change: substantial assets and political influence.

“If the effects of climate change significantly hurt the middle class, the inevitable reaction should in turn elicit a strong response from policy makers. It is a big reason why the latest United Nations Framework Convention on Climate Change (UNFCCC) agreement in Paris was signed by all 196 participating countries – the threat is real.”

The study found that in cities most at risk from climate change such as Los Angeles, Tokyo and Shanghai, spending priorities are noticeably different, with the middle class spending between 0.6 and 0.8% more on housing when compared to the national averages. In the US, middle class residents of high climate-change risk cities spend between $800 and $1,600 more a year on housing compared to a lower risk city.

However, despite their relative wealth, the global middle class is not well insured. In the US, which had the highest level of insurance penetration in the UBS study, around a third of weather-related losses were uninsured.


The report also found that middle class people are becomingly increasingly aware of the risks posed to them by climate change.

“In view of the middle class’s political and social importance, growing economic vulnerability may well translate into pressure for innovative policy making,” the report states. “The middle class represents the greatest opportunity for change”.

The UBS report marks a new perspective on the relationship between the middle class and climate change. Most existing analysis suggest that, as people become more wealthy, their increasing consumption of meat, consumer goods and energy will have a negative impact on the planet.

UBS is one of the most climate aware financial institutions on the planet, recently calling on investors to join the renewables revolution. The company – which has a commitment to using 100% renewable energy by 2020 – recently installed almost 600 solar panels on its UK headquarters in London.

Brad Allen

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