27 April 2011

S&P screws things up again

S&P, the people who brought you over-optimistic credit ratings for companies that paid for ratings, is now going to screw up the assessment of risk from climate change:
Standard & Poor's (S&P) is to routinely including an assessment of climate risk into its corporate credit ratings across all industrial sectors...


"This is still cutting edge stuff – there are very few people in the City who understand it."
I'll say, and that suggests that S&P's assessments will be misunderstood and misused, even when they are inaccurate (nobody knows if I am accurately describing things I imagine in my head!)

Bottom Line: S&P is going to increase volatility in the market but focusing people on a single wrong number. They don't know how local climate change is going to affect operations -- let alone how preparation and responses are going to modify those impacts.

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