Report Looks At Weighing Environmental Risk In U.S. States Ratings

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Mar 22, 2022, 16:15 ET

NEW YORK, March 22, 2022 /PRNewswire/ -- The U.S. states have tools at their disposal to address climate transition risks, but managing the risks and focusing on new opportunities may be uneven across states and may impose a negative influence on credit quality for some of them.

This is according to a new report, "ESG Brief: Incorporating Climate Transition Risk In U.S. States Credit Ratings," published today by S&P Global Ratings.

"In our consideration of 'E' factors that influence state credit ratings, climate transition risk is most prevalent in states with high fossil fuel production and energy generation, particularly when states draw significant economic or financial resources from these carbon-intensive industries," said S&P Global Ratings credit analyst Thomas Zemetis. "We primarily consider climate transition risks within our credit analysis of a state's economic and budgetary performance, particularly when considering gross state product composition, number of jobs associated with the energy sector, and revenue collected from severance taxes that fund operations.

"We also consider how states are attracting sectors that are more insulated from transition risk, how states incorporate transition risk into long-term financial and capital planning, and how they enable cross-agency and regional coordination to reduce greenhouse gas emissions."

Climate transition risk considers the implications of the world's transition to a low carbon and greener economy through a reduction in greenhouse gas emissions, shifts in public sentiment and consumer demand, changes in climate policy or legislation, or technological advancements which could lead to significant swings in demand and costs for development of certain products and services.

This report does not constitute a rating action.

The reports are available to subscribers of RatingsDirect at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase copies of these reports by calling (1) 212-438-7280 or sending an e-mail to [email protected]. Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request copies of these reports by contacting the media representative provided.

Media Contact:
Miriam Hespanhol, New York (1) 407-793-0452
[email protected]

Analyst Contacts:
Thomas J Zemetis, New York + 1 (212) 4381172
Nora G Wittstruck, New York + (212) 438-8589
Geoffrey E Buswick, Boston + 1 (617) 530 8311
Oscar Padilla, Dallas + 1 (214) 871 1405

Key Contacts:
Americas Media Relations: (1) 212-438-6667
[email protected]

Americas Customer Service: (1) 212-438-7280
[email protected]

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