Add to Bookmarks Scope Ratings says climate-related transition risks are distributed widely among differing regions, with the euro area, overall, less exposed than the Anglosphere countries – US, Canada, UK, Australia and New Zealand – according to scoring of the categories of environmental risks facing 132 sovereign states. Differences in economic structure, and specifically, the varying dependence on fossil fuels to produce a unit of GDP, drive the divergent scores when we assessed environmental risk relevant to sovereign credit ratings. Transition risks are already credit-relevant today given the international political commitment to reduce global carbon emissions over the coming decades. Scope’s evaluation of environmental risk factors that are relevant and material for sovereign creditworthiness also include physical and resource risks. Here, it is low-income countries – mostly African economies along with Asian, Latin-American and Caribbean countries – that face the highest physical risks, whether these are event-driven or arise from longer-term shifts in climate patterns.