Moody's to take climate change into their credit rating for state and local bonds

A little background. Moody's Investors Service is a leading provider of credit ratings, research, and risk analysis. Moody's commitment and expertise contributes to transparent and integrated financial markets, protecting the integrity of credit. Our ratings and analysis track debt covering more than:

  • 130 countries
  • 11,000 corporate issuers
  • 21,000 public finance issuers
  • 76,000 structured finance obligations

Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Such independent credit ratings and research also contribute to efficiencies in fixed-income markets and other obligations, such as insurance policies and derivative transactions, by providing credible and independent assessments of credit risk. 
In Moody’s default studies validate our predictive ratings. Our published research and investor briefings draw thousands of attendees each year and keep investors current with the rationale underlying our credit opinions. a very important decision which will impact on coastal communities all through the USA . Moody's Investment Service have now explained how it will incorporate climate change into its credit ratings for state and local bonds.  
This will mean that  should cities and US states not have an appropriate resilience plan to don’t deal with risks from surging seas or intense storms, they will be seen to be at greater risk of default.
"What we want people to realize is: If you’re exposed, we know that. We’re going to ask questions about what you’re doing to mitigate that exposure," Lenny Jones, a managing director at Moody’s,  "That’s taken into your credit ratings."
This is an important first step. There was a push this year by Nigeria  to have a UN General Assembly resolution to seek all stock exchanges to request their listed companies to have to produce their ESR reports like they produce their financial reports and then for the credit rating agencies to then use that data when they are rating. This will come back on the table at the Sustainable Finance Summit being organized by the UN Secretary General in September 2018.


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