Environmental risks are becoming significant to a growing crop of corporate issuers, Moody’s Investors Service says in a new report.<\/p>\n
The rating agency said the prospect of a shift to a low-carbon economy represents a very high, or high, environmental risk to 13 sectors, representing a combined US$3.4 trillion in rated debt.<\/p>\n
The amount of debt held by sectors facing high risk is up 49% from 2018, and up 64% from 2015, Moody’s said.<\/p>\n
For instance, the rating agency said the integrated oil and gas sector and the auto parts supply sector have moved from the moderate risk category to high risk since 2018.<\/p>\n
The report is based on a review of 89 global sectors, with a total US$79 trillion of rated debt.<\/p>\n
Additionally, Moody’s said sectors representing US$8.7 trillion in debt have exposure to both transition and physical climate risks.<\/p>\n
\u201cOur analysis shows that $8.7 trillion, or 11% of Moody’s total rated debt globally, is inherently exposed to heightened climate risk,\u201d said Ram Sri-Saravanapavaan, assistant vice-president and analyst at Moody\u2019s.<\/p>\n
\u201cThis highlights the likelihood that the impact of climate risk on issuers’ credit profiles will continue to grow as the transition to a low-carbon economy accelerates and the adverse effects of physical climate change become more evident,\u201d he said.<\/p>\n
In terms of individual environmental risk categories, Moody’s said 18 sectors with US$7.2 trillion in debt are facing physical climate risk, 16 sectors with US$4.5 trillion in debt have carbon transition risk, and waste and pollution risk affects 18 sectors with US$5.2 trillion in debt.<\/p>\n","protected":false},"excerpt":{"rendered":"
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