ESG & Investing

Bond Investors Warned of ‘Trouble Brewing’ Over Climate Risk

IEEFA publishes report outlining urgent need for regulations
Some issuers may face ‘multi-notch’ downgrades on climate

Vehicles stranded in mud following Typhoon Doksuri in the Mentougou district of Beijing, China, on Thursday, Aug. 3, 2023. The deluge of rain that triggered floods and killed at least 20 people in northern China this week was the heaviest to hit Beijing since record-keeping began in the 19th century.
Source: Bloomberg

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By Gautam Naik

August 21, 2023 at 8:32 AM UTC

Updated on

August 21, 2023 at 9:49 AM UTC

This article is for subscribers only.

Bond investors can’t rely on credit ratings to give them a fair assessment of the climate risk they’re exposed to, and should brace for “trouble ahead,” according to the Institute for Energy Economics and Financial Analysis.

From within the big three credit ratings companies — Moody’s Investors Services, S&P Global Ratings and Fitch Ratings — warnings have already been issued, but these have gone largely unnoticed, IEEFA, a US-based nonprofit, said in a statement on Monday.