‘Sovereign Climate Risk Ratings’: a new standard for assessing climate risk’s impact on GDP
At the 2026 EDHEC Climate Research Conference in London (Tuesday, June 23), Scientific Climate Ratings, an EDHEC Venture, announced the launch of a new standard: ‘Sovereign Climate Risk Ratings’
Scientific Climate Ratings, an EDHEC venture, is proud to unveil “Sovereign Climate Risk Ratings”, a groundbreaking scientific framework designed to measure and price the macroeconomic consequences of rising temperatures on sovereign economies. Using a letter-grade scale from A to G, this new standard evaluates over 95% of global economic output, covering 191 countries and 3,400 subnational regions.
• Read the official press release (June 24, 2026)
• Visit https://scientificratings.com/sovereign-ratings/
Developed through the academic rigor of the EDHEC Climate Institute and the market expertise of Scientific Climate Ratings, an EDHEC Venture, these ratings offer an unprecedented view of how chronic physical climate risks will reshape the global economy, identifying both the most vulnerable and the most resilient countries and regions in terms of Gross Domestic Product (GDP) impact.
“Our framework provides the missing transmission channel between climate warming and sovereign fundamentals, identifying structural exposure before spreads fully adjust.” Rémy Estran-Fraioli, PhD, CEO of Scientific Climate Ratings.
The ratings assess chronic physical risks driven by temperature-induced productivity changes across 191 countries and over 3,400 regions. The methodology will continue to expand, incorporating additional quantitative metrics, greater granularity, and progressive estimates of expected sovereign spread adjustments.
Each country receives a letter grade from A (lowest exposure) to G (highest exposure). These ratings deliver economically interpretable, scenario-consistent expected macroeconomic impacts, empowering investors, asset managers, and banks to quantify and price sovereign climate risk. By 2035, most of Western Europe rates A to C, while much of Africa rates D to G, a divide that tracks distance from the equator almost as closely as it tracks emissions.
“Sovereign Climate Risk Ratings quantify chronic risks as an unconditional expectation that can be added to investors’ financial models. The competitive edge of this rating is the early identification of structural sovereign exposure before it is priced into market spreads.” Nicolas Schneider, PhD, Senior Research Engineer-Macroeconomist at the EDHEC Climate Institute
Sovereign Climate Risk Ratings are calculated at two reference horizons, 2035 and 2050, providing investors with standardised benchmarks for comparing countries over time. Annual time series are also available, allowing users to analyse the evolution of projected impacts at specific intervals.
A standout feature is the subnational granularity: national GDP impacts are derived from Gross Regional Product (GRP) estimates, capturing significant intra-country variations. The US is a case in point: despite a national average temperature near the productivity optimum, population-weighted regional data drive a projected GDP-per-capita loss of -4.6% by 2035 and -10.4% by 2050, a sovereign rating of E.
