The loss of glacier-fed freshwater supplies could put $4 trillion in global GDP at risk, disrupting agriculture, energy production, and urban water supplies. As we mark World Water Day 2025, the spotlight is on glaciers—natural water reserves that store nearly 70% of the world’s freshwater and sustain billions of people and industries. The UN General Assembly has declared 2025 the International Year of Glacier Preservation, underscoring the urgent need for action.

Financial institutions play a key role in addressing water-related risks and mobilizing finance for climate resilience. From risk exposure in water-dependent industries to financing adaptation solutions, banks, insurers, and investors have a direct stake in safeguarding global water security.

The economic risks of glacier loss

Glacier loss is not just an environmental crisis—it’s a financial one. As glaciers melt at an accelerating rate due to climate change, the economic repercussions are mounting:

  • $4 trillion in global GDP is at risk as shrinking freshwater reserves threaten key sectors such as agriculture, energy, and tourism.
  • Water scarcity could reduce economic productivity by up to 6% of GDP in some regions, driving up costs and disrupting industries.
  • Infrastructure and real estate assets worth billions are increasingly exposed to glacier-related hazards such as floods, landslides, and rising sea levels.

Regions that depend on glacial water, including Peru, Pakistan, and parts of the European Alps, face heightened water security risks. In South Asia, glacial loss threatens agriculture, potentially exacerbating global food price volatility. In the United States, declining snowpack in the Columbia River Basin could reduce hydropower generation, a multi-billion-dollar industry.

Meanwhile, financial institutions with exposure to urban infrastructure, ski tourism, and hydropower projects must assess the implications of reduced glacial meltwater. By 2050, the winter tourism sector alone could see losses exceeding $30 billion due to declining snow cover.

How financial institutions can respond

UNEP FI members are already engaging in water risk assessment, adaptation finance, and nature-based solutions to enhance water security. Glacier preservation aligns with broader sustainability efforts in climate risk management, insurance solutions, and sustainable infrastructure financing. Key areas for financial institutions include:

  1. Water security and infrastructure
  • Banks and insurers are integrating water stress metrics into risk assessments, helping businesses adapt to changing water availability.
  • Investment in climate-resilient water management, such as glacier monitoring and early warning systems, can reduce exposure to glacier-related risks.
  • Sustainable desalination and water recycling technologies are expected to grow into a $30 billion market by 2030, offering new investment opportunities.
  1. Renewable energy and hydropower adaptation
  • Hydropower provides over 60% of renewable electricity in many glacier-fed regions but faces increasing volatility. Grid modernization and adaptive hydropower investments can improve resilience.
  • UNEP FI members are exploring sustainable hydropower financing, ensuring projects consider long-term water availability.
  1. Nature-based solutions for glacier protection
  • Restoring mountain ecosystems and reforesting glacial watersheds can slow ice loss while generating carbon credits, creating financial and environmental benefits.
  • Green and Blue bonds are emerging as financial tools to fund glacier conservation, water security, and coastal resilience projects.

A call to action for the finance industry

To help sustain these assets that so many aspects of the globe’s economies rely on including businesses and livelihoods, financial institutions should embed glacier preservation into risk management frameworks, investment strategies, and insurance models. By supporting projects that enhance water security, climate adaptation, and sustainable infrastructure, they can safeguard assets, mitigate financial risks, and drive economic resilience in a world facing increasing water stress.

UNEP FI’s role

Through initiatives on water risk disclosure, nature-based solutions, and climate adaptation, UNEP FI is working with financial institutions to integrate freshwater and glacier-related risks into decision-making. By aligning finance with global water security, UNEP FI members can lead the way in protecting critical natural resources while unlocking long-term economic opportunities.

Find out more about UNEP FI’s work on nature here.