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PRESS RELEASE:
Scientific Climate Ratings spotlights nations most at risk
for economic fallout due to climate change
Sovereign Climate Risk Ratings quantify the future effects of chronic physical climate risk
on the GDP of 190+ nations and 3K+ subregions, filling a sovereign pricing market blind spot
24 June, 2026
Scientific Climate Ratings is pleased to announce the release of Sovereign Climate Risk Ratings, a new scientific standard for understanding and pricing the macroeconomic impact of rising temperatures on sovereign economies.
Based on the academic research and expertise of the EDHEC Climate Institute and the in-depth market insights of Scientific Climate Ratings, Sovereign Climate Risk Ratings capture, for the first time, the winners and losers in a future global economy where the effects of chronic physical climate risk have real and lasting impacts on Gross Domestic Product (GDP).
These ratings deliver economically interpretable, scenario-consistent expected macroeconomic impacts, enabling investors, asset managers and banks to put a price tag on sovereign climate risk. One of the key strengths of Sovereign Climate Risk Ratings is their subnational granularity: national GDP impacts are derived from estimates of Gross Regional Product (GRP), allowing the methodology to capture significant variations within a single country.
For example, the United States of America is a sovereign entity with high internal climate heterogeneity: projected impacts vary substantially between warmer southern states such as Arizona, Texas and Florida, and cooler northern states such as Minnesota, Montana and North Dakota. By accounting for these subregional variations and differences in population distribution, the methodology projects a GDP-per-capita loss for the US of -4.6% in 2035 and -10.4% in 2050.
These grades provide a clear picture of winners and losers. For example, by 2035, the US has an overall grade of E, whereas most of Western Europe has grades ranging from A to C. Much of the African continent will be heavily exposed to extreme temperatures, with grades ranging from D to G. (See appendices for more information.) The table below illustrates the range of projected impacts across a selection of major economies, highlighting how exposure can vary significantly even among G20 countries.
| Country | 2035 impact (%) | 2050 impact (%) | Sovereign Rating |
|---|---|---|---|
| USA | -4.6 | -10.4 | E |
| China | -3.8 | -8.5 | C |
| Russia | -0.8 | -1.7 | A |
| France | -2.6 | -5.9 | B |
| United Kingdom | -1.8 | -4.0 | A |
| Australia | -3.8 | -8.6 | C |
| Canada | -3.4 | -7.7 | C |
| Brazil | -5.8 | -13.0 | G |
| India | -4.8 | -10.8 | E |
Table: Projected GDP-per-capita impacts in 2035 and 2050 under the Expected Scenario, and 2035 Sovereign Climate Risk Ratings, for a selection of G20 economies.
Sovereign Climate Risk Ratings are calculated at two reference horizons, 2035 and 2050, providing investors with standardised benchmarks for comparing countries over time. Annual time series are also available, allowing users to analyse the evolution of projected impacts at specific intervals. Each country receives a letter grade from A to G, with G representing the highest level of exposure.
The ratings and their underlying macroeconomic impacts are available across nine forward-looking climate pathways: the seven scenarios published by the Network for Greening the Financial System (NGFS), complemented by two higher-warming pathways, Climate Breakdown and Climate Destabilisation developed by the EDHEC Climate Institute.
The framework will continue to evolve through additional quantitative metrics, enhanced granularity and the progressive integration of estimates of expected sovereign spread adjustments.
“Climate change is a global phenomenon, but climate risk is local and financial. Our framework captures the structural, compounding output losses caused by chronic warming at the regional level and aggregates them into sovereign-level impacts,” said Rémy Estran-Fraioli, PhD, CEO of Scientific Climate Ratings. “It provides the missing transmission channel between climate warming and sovereign fundamentals, identifying structural exposure before spreads fully adjust.”
“Chronic risks rarely dominate headlines, but increasingly, they are impacting a nation’s gross productivity, thereby reducing growth potential,” said Nicolas Schneider, PhD, Senior Research Engineer-Macroeconomist at the EDHEC Climate Institute. “Our framework quantifies this risk as an unconditional expectation that can be added to investors’ financial models. The competitive edge of this rating is the early identification of structural sovereign exposure before it is priced into market spreads.”
Sovereign Climate Risk Ratings cover chronic physical risk arising from temperature-driven productivity shifts across 191 countries and more than 3,400 subnational regions, which together represent over 95% of global economic output.
Download a pdf version here.