When nature feels the heat

In an earlier article, we discussed why 1.5°C still matters as a global climate goal – even if we exceed it. But the consequences of global warming don’t stop at higher sea levels or hotter summers. As temperatures rise, nature feels the strain, and the side effects are already affecting us.

Climate change and biodiversity

Climate change and biodiversity loss are two sides of the same coin. Rising temperatures dry out wetlands, bleach coral reefs, and shift growing zones. At the same time, damaged ecosystems can no longer absorb carbon or regulate water like they used to. When we talk about biodiversity loss, we’re not just talking about birds and bees. We’re also talking about food security, job security, and stability in everyday life.

Nature under pressure

From the Amazon to the Mediterranean, the world’s ecosystems are already under strain. The Amazon, a vital carbon sink, is approaching a tipping point where parts of the rainforest could dry out and collapse, potentially releasing more carbon than they absorb. Closer to home, the Mediterranean Sea is warming faster than almost any other region, causing landscapes to dry and putting pressure on agriculture, water supply, and tourism.

Further out of sight lies the Earth’s biggest largest carbon sink, the ocean, where coral reefs are bleaching and breaking down at an alarming rate. Bleaching is a natural stress response – it regularly occurs to a limited extent due to weather events like El Niño – but warming waters are making it more frequent, more severe, and more difficult for reefs to recover from. Although they cover less than 1% of the ocean floor, coral reefs support at least 25% of all known marine species. According to the IPCC and WWF, at 1.5°C of warming, we risk losing 70% to 90% of reefs worldwide. At 2°C, this rises to more than 99%. This adds another challenge to already declining fish stocks and raises potential food security issues. Put simply: what starts underwater impacts what ends up on our plants.

Food and jobs

As nature unravels, so too do the systems we depend on for food and jobs. Southern Europe is already experiencing the effects of repeated droughts and heatwaves, with declining crop yields and shifting growing seasons. These are resulting in higher food prices and increased uncertainty for farmers and fishers. Europe, and the Netherlands in particular, relies on stable weather, healthy ecosystems, and functioning supply chains for food security.

But... perhaps there is a positive flip side. Climate change also brings new opportunities. Crops that once thrived in Spain might in the future do as well – or even better – in Northern Europe. Longer growing seasons could offer new agricultural opportunities in countries like Germany or the Netherlands. But what happens to those people who relied on the old climate for their livelihoods?

Every tenth of a degree counts

Climate change can potentially create new winners, but every tenth of a degree of warming still matters. Research shows that global food production sharply declines above 2°C of warming. The same pattern seen in coral reefs is playing out in agriculture. A study by Zhao et al. (2017) found that maize yields drop on average by 7.4% for every degree of warming. At 1.5°C, there is already a measurable decline in yields; at 2°C, global losses for maize and wheat can reach 10-15%. This makes it clear that every tenth of a degree of warming makes the difference between a difficult harvest and a devastating one.

These risks aren’t limited to farmers and food producers here in Europe. They ripple through global trade. Research for the European Climate Foundation shows that more than two-thirds of six major food commodities imported into the EU in 2023 – including maize and cocoa – came from countries poorly prepared for climate change.

As extreme weather events become more frequent and the natural world becomes less resilient, global supply chains become more vulnerable. Europe’s food security therefore depends not only on local harvests but also on global ecological stability.

How we address climate change

At a.s.r. asset management, we see climate change and biodiversity loss as interconnected challenges requiring a joint response. In our position papers on Climate Change & the Energy Transition and Biodiversity & Natural Resources, we lay the foundation for our integrated approach and outline our plans for the future.

We take action on three fronts: improving our understanding of biodiversity risks and dependencies in our portfolio, engaging companies in an integrated way on both climate change and biodiversity, and investing in solutions that help us adapt to the effects of climate change. For us, this goes beyond ticking a box. We are convinced that we cannot tackle climate change without nature, and that ensuring food security and jobs means protecting the natural systems that support them. Responsible investing can play a role in this, provided it is accompanied by clear objectives, transparency, and recognition of the associated risks.