Wealthy Kenyans cite climate change as a risk to their wealth

Kenya’s dollar millionaires have identified climate change as the greatest threat to their wealth, latest Wealth Report by Knight Frank.

From the report, 84 percent cited the global environmental change as a financial risk, compared to 54 percent worldwide, and 64 percent across the rest of Africa.

These details are contained in the attitudes survey released with the 2022 Wealth Report from Knight Frank.

Andrew Shirley, editor of The Wealth Report at Knight Frank said last year’s attitude’s survey did not identify climate change as a wealth risk, making for a rapid shift in risk perception from Kenya’s High-Net-Worth Individuals, because Kenyans are living on the frontline of these environmental changes, making them far more conscious of the environmental impact than many western investors.

In addition to concerns about climate change, Kenya’s wealthy remain more worried about new variants of Covid-19 than HNWIs in other regions.

Ben Woodhams, Knight Frank Kenya MD said added that these attitudes from their most wealthy bring home the reality and importance of ensuring that the entire population is protected from future variants, as any future peak in infections, lockdowns or lock-outs will inevitably take a heavy toll financially and socially.

The greater threats to Kenyan wealth, according to HNWIs

  Global average Kenya
Climate change 53% 84%
New Covid-19 variants 66% 81%
Equity markets 10% 69%
Supply chains 55% 63%
Deglobalisation 40% 56%
Wealth transfer to the next generation 20% 31%

 

Kenyan millionaires also perceive greater threats from the country’s challenges with global trade after the disruptions caused by the Covid-19 pandemic to supply chains and globalised flows and relationships. Some 63 percent of Kenyan HNWIs now view supply chain disruption as a potential threat to their wealth, compared with 55 percent worldwide – with businesses, everywhere, acutely aware of the high impact that any supply disruption can cause to economic outcomes.

More exceptionally, Kenyan millionaires report greater concerns about succession than the norm.

“The transfer of wealth to the next generation is a key moment of vulnerability for HNWIs worldwide, as poorly managed successions can lead to rapid wealth depletion. In Kenya, however, with frequent evidence of succession disputes and even protracted court cases, the threat is made greater through the degree of challenge in simplifying or accelerating the outcome of such disputes,” said Andrew.

This has seen 31 percent of Kenya’s millionaires cite succession as a threat to their wealth, compared with a global average of 20 percent.

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