Document summary
In an effort to align corporate credit analysis and climate change risk, this report looks at how climate risk might affect a sample of Standard & Poor's rated oil companies. This study is the result of a collaboration with the Carbon Tracker Initiative and aims to respond to investors' growing interest in understanding the implications of potential future carbon constraints on the oil sector by assessing the implications of such risk on moderately sized, independent, unconventional oil companies and major oil and gas producers. Results show a likely deterioration in the financial risk profiles of smaller companies which could potentially lead to negative outlook revisions and then downgrades over 2014-2017. The effects on major oil and gas producers would be more muted, suggesting that these would remain consistent with metrics considered commensurate with their respective ratings until 2016-2017.