Climate Cases Haven’t Hurt Oil, Gas Credit Quality, S&P Says: Navigating Uncertainties and Costs
The outcome of many climate cases remains uncertain, contributing to the difficulty in predicting their full impact on corporate entities. The associated costs, both direct—like legal fees and settlements—and indirect—such as reputational damage—are non-trivial but thus far have not significantly affected the credit standings of involved companies.
Looking Ahead: Climate Litigation as a Persistent Risk Factor
Despite the current stability, S&P foresees climate litigation as one of multiple mechanisms through which climate transition risks could materialize for issuers in the future. This anticipation calls for continued monitoring and assessment of how these legal battles may shape the industry’s credit landscape.
In summary, while the surge in climate cases poses potential challenges, its impact on the credit quality of the oil and gas sector has been limited, with the industry demonstrating a capacity to absorb and adapt to these legal pressures.
