As another overheated summer devastates swathes of the northern hemisphere, sustainability experts in both Canada and the UK are urging policymakers, financial markets, and investors to act on “irrefutable” evidence that economic well-being everywhere now depends upon swift climate action.

In Canada, British Columbia and the Northwest Territories continue to grapple with multiple wildfires, with concern growing that a coming cold front will bring lightning and more fires, especially to drought-stricken southern B.C.

In the UK, Save the Children warns that the Welsh county of Torfaen is currently enduring the fourth-worst air quality in the world thanks to wildfire smoke.

Meanwhile, both Andy Burnham, the UK’s new prime minister, and Canada’s Mark Carney are slow-walking climate action, with the latter recently telling Canadians that the climate action plan laid out by his predecessor was too expensive.

Both here in Canada and abroad, “the reality is quite the contrary,” write Christina Caron, Canadian environmental economist and former federal public service executive, and Glen Hodgson, former chief economist at the Conference Board of Canada and a former member of Canada’s Ecofiscal Commission, in a recent op-ed for the Globe and Mail.

No Down Side to Swift Climate Action

“The evidence is now irrefutable that taking swift climate action will be far cheaper than delaying it,” say Caron and Hodgson, pointing to everything from asset destruction to plunging productivity to spiking food costs and lowered living standards, as the climate crisis continues to accelerate.

Contributing to such certainty, they note, was a November 2025 statement issued by the Network for Greening the Financial System, a coalition of central banks (including Canada’s) in the lead-up to COP30, the most recent United Nations Climate Change Conference.

With gross domestic product (GDP) losses from regional extreme weather events, especially in Asia and Africa, now sufficient to generate significant aftershocks in the global economy, policymakers need to act fast, the coalition warned. That action will pay off, it added.

“An early and globally coordinated implementation of climate policies can limit the negative effects of a transition to a low-carbon economy, even in the short term,” the bankers wrote. “Early action could halve the cost of the transition by 2030,” even compared to a three-year delay.

Three months later, the UK’s Climate Change Committee (CCC) released an exhaustive report putting paid to the notion that serious climate action spells economic disaster—while demonstrating the costs of remaining ensnared in a fossil fuel economy.

“The total cost of a single fossil fuel price spike (like, say, invading Iran and kneecapping global oil and gas supply routes) is as large as the total net additional cost of meeting the pathway to net zero every year to 2050, writes UK sustainability journalist Tim Smedley, in a New Climate blog post summarizing the report.

In a stern rebuttal to pushback against its 2025 Seventh Carbon Budget, approved in June by the UK Parliament, the CCC report finds that both energy costs and losses are halved in a net zero world. Such efficiencies mean big savings for governments, with a net zero world “almost £40 billion a year cheaper by 2050,” writes Smedley.

Financial Markets, Investors Must Take Heed

Financial markets must also take note of the financial threat of climate-driven nature/biodiversity loss, says Soraya Kishtwari, a UK-based contributing editor at Green Central Banking, in a recent post for Corporate Knights.

“Nature loss could add US$162 billion per year to sovereign debt-servicing costs across 23 countries,” with China and India especially vulnerable, Kishtwari writes, citing UK-led research just published in the journal Nature Ecology & Evolution.

The study found that financial markets are sleepwalking through an $83-trillion “mis-pricing” error—a mistake owed to a persistent inclination to treat nature/biodiversity loss primarily as an environmental issue, rather than a foundational determinant of financial wellbeing.

“Environmental degradation undermines the natural foundations of economic activity, reducing productive capacity and the ability of governments to service debt,” the study authors write. “Currently, sovereign credit ratings ignore these risks.” 

Study co-author Matthew Agarwala, a professor of sustainable finance at the University of Sussex, told Kishtwari that all parties involved in addressing this massive “blind spot” should fear, and plan for, the sudden onset of tipping points in natural systems. 

While biodiversity losses incurred from “largely isolated one-off collapses” may be absorbed without massive disruption, “a global crisis is possible” should “coordinated collapses and abrupt tipping points catch us by surprise,” he said.

Investors must likewise urgently recognize that “climate change poses a non-trivial, non-diversifiable threat to the value of their portfolios,” and that corporate responses to this threat have “to date, relied on tools that aren’t up to the job,” writes Richard Robert, head of research at Volans, a London-based sustainability think tank, in a recent opinion piece for Reuters. 

From setting net-zero targets, to allocating capital to climate solutions, to engagement strategies, the corporate sector continues to act as if climate change were simply the result of correctable market inefficiencies—rather than proof of systemic market failure, Robert says.

But is climate change is a massive market failure because the “real economy”—the one that generates actual goods and services, rather than abstractions like financial products —is the prime driver of climate breakdown., since the production of those goods and services continues to depend on fossil fuels.

If that’s just a matter of market inefficiency, the solution is to “redirect the capital and the real economy will follow,” Roberts says. If it’s a market failure, the response must be to “redirect the real economy and the capital will follow.”

That difference means investors must engage directly with policymakers on climate policy and regulation, Robert says. But that will mean stepping outside their traditional practice of passive response to policymaking, a departure from norms that is urgently needed, he adds.

That the proportion of investors in Asia engaging in such conversations “jumped from a quarter to a third in a single year” from 2024 to 2025 suggests a growing appetite for pro-climate economic “re-direction,” Robert writes.

Investors who see the need to intervene shouldn’t fret about their lack of specific expertise, Robert adds. “Policy influence is not always about providing detailed feedback on draft legislation,” he writes. “Sometimes, investors’ role is simply to articulate a broad-brush perspective on the direction of travel they want to see from policymakers to make the transition investable.”