The credit impact of ESG considerations is highly negative or very highly negative for about 20% of the more than 5,700 debt issuers that we have scored for exposure to ESG risks. The credit impact of these risks is most pronounced among corporate, sovereign and sub-sovereign issuers.

The credit impact of initiatives announced at the COP27 climate summit will depend on how and when policymakers and market participants translate them into action.

The potential impact of sea-level-rise cannot be taken lightly. According to Moody’s Climate on Demand application, by 2040, 135 million people and up to 9% of GDP from the world’s 10 largest economies will be exposed to rising sea levels and associated flood risk.

US municipalities are increasing their regulations for commercial real estate energy use and emissions, leading to potential financial strains on owners and posing cash flow risk to properties underlying commercial mortgage-backed securities (CMBS). In the largest markets with fines, strains will be modest for most CMBS collateral.

The enormous environmental cost of mining crypto is one of the major barriers to widespread adoption and has prompted some calls for authorities to ban crypto mining altogether. Several initiatives are under way to improve the crypto industry's green credentials but there remains a lot more work to do.

This white paper quantifies U.S. environmental, macroeconomic, and federal fiscal impacts under four scenarios that assume different climate-related interventions.