Hurricane Maria was devastating for the residents of Puerto Rico. It hurt debt investors, too. Some of the island's bonds plunged more than 40 percent after the storm flooded the island, knocked out its electric power, and clobbered its economy. Now bond rating agencies such as Moody's Investors Service and S&P Global Ratings are looking at whether they should be including more disaster forecasting in calculating the grades they give to government debt and to companies in industries ranging from insurance to construction. The agencies have looked at these risks for years and issued reports on them, but in recent months they've been working to integrate this research more into individual ratings. In November, Moody's warned coastal cities and states to address their climate risks or face possible downgrades. A month later it issued a report highlighting 18 small islands, from Fiji to the Bahamas, that were "particularly susceptible to climate change." S&P analysts are working with its insurance practice on climate models and scenario research.
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