ESG & Investing

Ratings Firms Struggle With Climate Risk in $133 Trillion Market

Global warming is poised to increase borrowing costs for cities, countries and companies as record heat waves emerge worldwide.

A broken section of the Pine Island Road in the aftermath of Hurricane Ian in Matlacha, Florida, 2022.Photographer: RICARDO ARDUENGO/AFP
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With 46 straight days of 100-degree heat and coastal waters approaching hot-tub temperatures, Miami can seem like a clear example of the costs of a warming world. But analysts at S&P Global Inc. aren't sweating it.

They recently upgraded Miami’s credit rating, citing a robust tax base and labor market. The city’s “elevated” environmental risks, S&P says, are offset by mitigation projects such as those designed to counter rising sea levels.