Water Utilities, Climate Change, Bond Ratings and Insurance: Connections and Implications

By Erica Brown

The managers of two large utilities recently remarked to me that in recent discussions with bond rating agencies, the questions that arose about climate change dove much deeper than in recent memory. In both cases, rating agencies wanted to know specifically about what climate related risks the utilities were considering in their planning as well as what they were doing to manage those risks. The Association of Metropolitan Water Agencies (AMWA) has been tracking and reporting to its members about the interest of insurance companies and bond rating agencies in climate change and extreme events and has indeed observed that this interest has been steadily growing for the past several years.