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Do Sovereign Ratings Reflect Growing Climate Risks?

Sovereign credit ratings are independent assessments of the creditworthiness of a country or sovereign entity. The Big Three credit rating companies—Moody’s Investors Service, S&P Global Ratings, and Fitch Ratings — are largely responsible for interpreting the level of investment risk associated with the debt of a particular country. However, a growing number of investors, academics, policymakers, and regulators question whether credit ratings are accounting for the impact of growing climate risks. If these risks materialize, they threaten to trigger climate-induced sovereign downgrades as early as 2030.

How The Green Climate Fund Fights Climate Change

The Green Climate Fund (GCF) – a critical element of the historic Paris Agreement – has become the world’s largest climate fund, mandated to support developing countries raise and realize their Nationally Determined Contributions (NDC) ambitions towards low-emissions, climate-resilient pathways. Climate change offers businesses an unprecedented chance to capitalize on new growth and investment opportunities that can protect the planet as well.  

The EU’s Carbon Border Adjustment Mechanism

The EU’s Carbon Border Adjustment Mechanism

As part of the EU’s 10-step program titled “Fit for 55,” the commission introduced a controversial proposal for a carbon border adjustment mechanism (“CBAM”). If adopted, the commission will impose a levy on imports in carbon-intensive sectors with lower environmental standards than the EU. The proposal must now undergo the EU’s legislative process that requires the approval of both the European Parliament and the Council before it comes into effect.

Is The Paris Agreement Enough?

Is The Paris Agreement Enough?

The United Nations Framework Convention on Climate Change (UNFCCC) enacted the Paris Agreement in 2016 in response to the growing challenges of climate change. The agreement aims to limit the increase of global temperatures to 1.5 °C (2.7 °F) above pre-industrial levels. However, it’s projected that current pledges are not ambitious enough to limit global temperature rise to 1.5°C or even 2°C. Countries need to strengthen their commitments quickly enough to achieve the Paris Agreement targets.

Why SME Lending?

Small and medium-sized enterprises (SMEs) account for 90% of global businesses and are responsible for 7 out of 10 job opportunities in developing countries. However, 44% of SMEs are financially constrained and underserved by traditional finance institutions. Public and private sectors must work together to develop solutions to meet the growing demand for finance. While governments have the responsibility to improve market-enabling policies, the unmet demand presents an opportunity for financial institutions to engage.

Ghana’s Growing Need for Reliable Energy

The Ghanaian government has made significant efforts to improve its electrical infrastructure, yet access to reliable energy remains an impediment to economic development. Unplanned power outages continue to be a problem for the growing country due to growing supply & demand constraints. An additional generation capacity of 225 MW is needed by January 2024 and an additional 200 MW by January 2025 to preserve the security of Ghana’s energy supply.