As evidenced by natural catastrophes – such as earthquakes, storms and floods – environmental and climate risk is non-diversifiable and systemic. With this in mind, the integration of environmental and climate (E&C) concerns into corporate credit ratings is of rising importance to investors, lenders and insurers.
But market participants still require comparable and consistent climate-related information to make informed business decisions. Writing for Investment Europe, Michael Wilkins, Managing Director, Environmental and Climate Risk Research, S&P Global Ratings, says: “At present, risks and opportunities related to E&C factors are incorporated into credit ratings when they represent a material impact to the creditworthiness of an issuer. In order for these factors to be seamlessly integrated, comprehensive and reliable disclosure is essential.”
To read the full article, please click here.