Do you want to know which companies are acting on climate change? So do some major players in the global financial system: credit rating agencies.
That’s a big deal. Ratings firms such as Moody’s Investors Service and Standard & Poor’s Financial Services LLC look at the financial strength of companies and governments. They see companies that fail to prepare for climate change as more risky, and give these companies lower ratings.
People around the world rely on these ratings to decide where to put their money. So when companies’ and countries’ preparation for climate change affects their credit ratings, investors take note.
That actually happened 300 times between 2013 and 2014 when Standard & Poor’s slapped lower ratings, or threatened to do so, because of environmental and climate factors.
Green investment climate
Both Moody’s and Standard and Poor’s also are getting more involved with “green bonds,” a type of loan that raises money for projects with environmental benefits.
The green bond market is surging — in the first 10 months of 2016, Standard and Poor’s estimated the market at $64.3 billion, already one and a half times the total for 2015.
When the green market is booming, money available to deal with climate issues increases. That’s a good sign for the Paris climate agreement goal to mobilize $100 billion annually to help developing countries respond to climate change.
Other businesses also see the value of going green. For example, tech giants Apple Inc. and Google have gotten into the solar business.
You can learn more by following the November 7–18 global climate summit, called COP22, @US_Center, and use the hashtags #ActOnClimate and #AskUSCenter.