It #klimaat is becoming more and more a credit risk for the #Kredietbeoordelaars - Yes. Climate change is becoming increasingly important in the valuation of companies and governments by credit agencies S&P, Moody's and Fitch. “This is no more than a beginning.”

After the devastating credit crisis of more than ten years ago, they received loads of criticism: Moody's, Standard & Poor's and Fitch. These rating agencies had not seen, underestimated or even ignored the risks of the cut US mortgage portfolios under pressure from their clients, the banks, according to a US inquiry committee in 2011.

Credit agencies have a pivotal role in the financial system: their ratings — from the highest, AAA, to the lowest, D — should show how solid a company or government whose debts are traded. For example, investors should be warned of risks, and Moody's, S&P and Fitch, the three main rating agencies, failed hopefully at the time.

In 2020, they seem determined not to overlook a relatively young but growing financial risk: climate change.

It was a bit of a scare for the oil and gas world when Moody's threatened to withdraw the highest 'AAA' score from giant ExxonMobil (at S&P and Fitch it's called 'AAA'). Behind 'Aaa' Moody's placed the prospect 'negative', thus anticipating a possible downgrading. There is an “emerging threat to the profitability of oil and gas companies” due to the measures taken by many countries to “combat the effects of climate change,” Moody's said.

There are always several factors involved in credit assessments. In this case, for example, this was the negative cash flow of ExxonMobil.But it was remarkable that for the first time Moody's mentioned the climate as a negative factor for creditworthiness at a fossil energy giant.

I hope the pension funds will see this too.





It gets too hot under the feet of billionaires