Where will the climate financial crisis hit first? Is it in corporate earnings? Equity prices? Home values?
Sustainability advocacy organization Ceres sees the storm breaking in the US$4trn municipal bond market, where cities and local governments raise cash to finance everything from new infrastructure to public transit systems.
In this episode of Climate Proofers, Steven Rothstein and Jake Rascoff from Ceres raise the climate alarm on this oft-forgotten corner of the financial system and make the case for why better climate risk disclosure from cities, states, and local agencies is now an investor (and issuer) imperative.
The conversation highlights the disconnect between known physical risks and what’s actually being reported to investors, and makes the case for a standardized, forward-looking disclosure regime that can help communities attract capital for adaptation before disaster strikes.
With federal dollars for disaster response in question, insurance markets in retreat, and climate disasters growing in frequency and severity, Rothstein and Rascoff argue that municipalities can no longer afford to underplay material climate risks in their bond offerings.
If you're an investor, policymaker, or finance pro looking to better understand the climate perils facing the muni markets — this episode is for you.
Listen below, download from the Podcasts page on Climate Proof, or tune in via Spotify or Apple Podcasts.
📝Want the transcript? Become a member to get access here👇
We talk about:
👉 Why municipal bonds are highly exposed to climate risks
👉 The growing disconnect between physical climate threats and financial disclosures
👉 How lack of standardization in muni bond climate disclosures muddies the waters on local governments’ risk exposure and vulnerability
👉 The cascading financial effects of climate disasters, including insurance withdrawal, reduced property values, and increased borrowing costs for local governments
👉 Ceres’ push for market-wide reform, including voluntary and regulatory efforts to embed climate risk and resilience planning into municipal finance norms
🔗 Read ‘Leading with Transparency: A Guide to Strengthening Climate Disclosure and Resilience in the Municipal Bond Market’ HERE
🔗 Read Ceres’ report on insurance climate disclosure: ‘The Measurement Gap: A Deep Dive into Climate Risk Reporting in the US Insurance Sector‘ HERE
💻 Sign up for Ceres’ next webinar on insurance HERE
Thanks for listening!
Louie Woodall
Editor
