S&P to integrate climate risk into credit ratings
2011 February 21
S&P to integrate climate risk into credit ratings
Standard & Poor's (S&P) is to routinely including an assessment of climate risk into its corporate credit ratings across all industrial sectors, in anticipation of when climate policy begins to "bite hard" in the next few years.
Michael Wilkins, the London-based global head of carbon markets at the rating agency, told Environmental Finance that, up until now, the impact of climate change policies on the financial position of corporate borrowers "has been pretty benign".
"But there's a growing realisation that will change, and ... our group is working out to best to analyse that change ... and how to incorporate that into the credit rating process," he said
...
"This goes into the heart of how a business operates. That is something that investors need to understand. This is still cutting edge stuff - there are very few people in the City who understand it," Wilkins added.
Standard & Poor's (S&P) is to routinely including an assessment of climate risk into its corporate credit ratings across all industrial sectors, in anticipation of when climate policy begins to "bite hard" in the next few years.
Michael Wilkins, the London-based global head of carbon markets at the rating agency, told Environmental Finance that, up until now, the impact of climate change policies on the financial position of corporate borrowers "has been pretty benign".
"But there's a growing realisation that will change, and ... our group is working out to best to analyse that change ... and how to incorporate that into the credit rating process," he said
...
"This goes into the heart of how a business operates. That is something that investors need to understand. This is still cutting edge stuff - there are very few people in the City who understand it," Wilkins added.
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