Global environment risk gap
A recent study indicates that the loss of biodiversity could lead to a sharp increase in borrowing costs and the likelihood of countries facing sovereign debt crises. Currently, environmental risks are not adequately reflected in credit ratings, which estimate the value of assets at around $83 trillion. It is expected that the deterioration of vital ecosystems—such as marine pollinators and tropical forests—could increase sovereign debt interest payments by approximately $162 billion annually. Additionally, credit ratings for major countries like India and China might decrease by more than 4 and 5 notches respectively, thereby raising the cost of servicing their debts and impacting global financial stability.
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