A shifting climate is often treated like a distant environmental problem, but experts increasingly warn it’s also a major economic threat that many governments and financial institutions still aren’t fully pricing in.
A January 2026 report called Parasol Lost, produced by the Institute and Faculty of Actuaries and the University of Exeter, argued that many climate risk models underestimate how quickly warming could destabilize economies — potentially costing nations billions of dollars through cascading disasters, inflation, and financial shocks.
What is planetary insolvency?
Planetary insolvency is the report’s term for a worst-case scenario: society and economies becoming unstable because nature’s life-support systems begin to break down, including reliable water supplies, food production, stable coastlines, and predictable climate patterns.
The authors…
