Protecting Americans’ Financial Health in the Face of Climate Change

One frightening impact of climate change is the rise in extreme weather-related events. Natural disasters can be disastrous for financial health, so I was grateful for the chance to discuss this topic and explore potential solutions with Financial Health Network Members last month at our Member-exclusive Executive Roundtable.

The Financial Health Network’s research shows that 2 in 5 Americans live in states with high risk for losses from natural disasters. But people in those states are less frequently protected by residential insurance, leaving them much more financially vulnerable. Here are a few of my “ahas” from that discussion with Financial Health Network Members, including Principal Financial, Money Management International, and NeighborWorks America, and my research colleagues Kennan Cepa and Wanjira Chege:

1. 1. The Federal Emergency Management Agency (FEMA) and other agencies are putting in a lot of effort to help people in high-risk areas prepare to evacuate in the event of a disaster. But what about financial preparedness? What should someone’s financial “go kit” include? There is an opportunity for financial services providers and nonprofits to help people become more financially prepared before a disaster strikes.
   2. Nonprofits who operate on the ground play a critically important role in both disaster preparedness and recovery. They are trusted advisors that people can turn to for guidance, especially as there is often a flood of resources coming from outside the community. Helping these nonprofits prepare and be resilient – while perhaps not the most obvious place for funders to direct their relief dollars – can actually have a great impact on a community’s ability to recover quickly.
   3. Financial services companies and other large employers must also be ready to support their employees who live in disaster-prone areas. Many organizations have set up relief funds for their employees that enable them to quickly respond when a disaster strikes. Canary, a Financial Solutions Lab Accelerator cohort company, is an example of a provider that makes this easy for employers.

The Financial Health Network’s Member network includes a diverse array of financial services providers, nonprofits, fintechs, and other organizations. Our Members are uniquely positioned – both directly and through partnerships – to support households and communities who are at risk of financial harm due to climate change. We were pleased to host this important conversation and look forward to more in our upcoming Member-exclusive Executive Roundtables.  If your organization is not currently a Member and would like to explore becoming one, please reach out.