Climate change will adversely affect sovereign ratings, but intrinsic uncertainties make it challenging to robustly quantify the impact, Fitch Ratings says. We expect climate change to become a more important driver of rating changes as the effects become clearer, closer and more material.
Fitch aims to capture climate change in sovereign ratings, as it does for all factors that it believes are relevant and material for creditworthiness. However, the magnitude and timing of the impact on individual sovereigns is highly uncertain.
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