Document summary
This report concludes phase I of the E-RISC (Environmental Risk in Sovereign Credit) project which investigates sovereign credit risk from the angle of natural resource risks and environmental impacts. The project explored to what extent natural resource risks can impact a country's economy and thus, its ability to pay its debts. With a current amount of more than USD 40 trillion of outstanding sovereign debt, the stakes are high and the issue demands closer inspection. Results provide a first insight into how factors such as resource prices, ecosystem degradation and climate change impacts on national economies, and provide a sense of how these criteria can be factored in sovereign credit risk models and hence in selection and weighting of sovereign bonds and sovereign credit ratings.