Poor credit ratings imperil climate action

Factory greenhouse gasBecause of their limited ability to access financial markets, developing countries are struggling to cut greenhouse gas emissions, says a ratings agency. Of the 170 countries that ratified the Paris Agreement, 60 have disclosed a financial plan to meet their responsibilities, according to research by S&P Global Ratings. Together, these 60 countries expect the cost to be $5.3 trillion. “One of the key challenges facing countries that are most exposed to the physical impacts of climate change – typically emerging and developing economies – is their limited access to financial markets, which is partly due to their lower creditworthiness,” said the agency. Many countries hope the private sector will meet the cost of adapting to a low-carbon economy. However, S&P Global Ratings says many areas have received too little private investment, such as energy efficiency or building resilience. “Recent extreme weather events have shown just how vulnerable these countries are, particularly if the frequency and intensity of these events increases through climate change, and the severity of the impact. For example, Hurricane Harvey is expected to cost the US around 1% of its GDP, whereas the damage caused by Hurricane Irma is likely to cost some Caribbean Islands more than their annual GDP, according to reports.” ©2017 funds global asia

Executive Interviews

INTERVIEW: Joining the family

Dec 12, 2017

An acquisition has increased the visibility of Natixis investment managers in Australia. George Mitton talks to its local chief executive.

INTERVIEW: ‘It cannot be excluded’

Sep 27, 2017

Bond Connect’s launch means China’s onshore bond markets are more accessible than ever. Mo Ji, an economist at amundi, tells George Mitton why that matters.

Roundtables

REAL ESTATE ROUNDTABLE: In search of a home

Jul 17, 2017

From Korean warehouses to Chinese hospitals, investors’ holding periods are growing in Asia. But in a market awash with liquidity, so is competition for assets. Our panel in Hong Kong discuss real estate investment.

ROUNDTABLE: More transparency, less certainty

Mar 20, 2017

Our panel discussed exchange-traded funds, regulatory overdrive and whether mutual fund recognition has been a failure. Chaired by George Mitton in Hong Kong.