Climate change poses a growing, structural risk to national economies. As warming accelerates, countries face permanent productivity losses that compound over time, affecting GDP trajectories, fiscal capacity, and sovereign creditworthiness.
Beyond being an emerging regulatory requirement, understanding sovereign climate exposure is essential for informed investment decisions and resilient portfolio construction.

We provide scientific, granular, and financially interpretable information to understand sovereign climate risk and make well-informed investment decisions.
Specifically, we offer:

• Long-term sovereign valuation: Climate-induced GDP losses are structural and irreversible. Our ratings quantify these expected losses under multiple scenarios, enabling climate-adjusted sovereign bond valuation and portfolio construction before spreads adjust.
• Risk management and stress-testing: Banks and institutional investors can use our scenario-consistent damage estimates for ICAAP processes, RWA modelling with climate-stressed growth factors, and ECB/supervisory stress-testing requirements.
• Regulatory compliance: With tightening supervisory expectations around climate risk integration, our scientifically grounded and transparent methodology supports reporting and regulatory compliance needs.
• Consistent benchmarking: With coverage of 191 countries covered across 9 scenarios, our ratings let you natively compare against :
  • countries in the same regional market groups
  • countries facing similar climate conditions

Our ratings include full transparency on data inputs, outputs, and peer-reviewed methodologies applied. Every sovereign rating is accompanied by the underlying expected macroeconomic loss figure (% GDP per capita) under each scenario, allowing users to see the quantified damage behind the letter grade. The end-to-end methodology is documented in publicly available technical papers, ensuring complete scientific reproducibility.

The Sovereign Climate Risk Rating evaluates chronic physical risk under 9 NGFS-aligned scenarios : the 7 original NGFS Phase-V pathways plus two additional extreme pathways produced by EDHEC Climate Institute.
Ratings are assessed under 2035 and 2050 time horizons, but any user benefits from the full yearly time series supporting these results.
For more details on the methodology and scenario calibrations, please refer to our online documentation or enquire for a call.

Version 1 of the Sovereign Climate Risk Rating focuses exclusively on chronic physical risk - specifically, the temperature-driven shifts in productivity growth that cause permanent, compounding damages to economic output. While markets already adjust and price for acute risks, this most structural and irreversible climate component remains underpriced in long-term macro trajectories.

While most providers offer climate vulnerability scores or composite indicators based on expert judgement and opaque methods, our rating delivers econometrically estimated, causally identified expected macroeconomic losses. The damage functions are grounded in within-region variation over a 1970–2018 historical panel and supported by peer-reviewed publications.
This is then aggregated from more than 3,400+ regions towards 191 sovereigns, a granularity unmatched in the market. Our outputs are not rankings or scores: they are probability-weighted, scenario-consistent expected GDP losses, enabling investors to price sovereign climate risk rather than merely rank it.