Extreme Weather and Resiliency: What Should Municipals Disclose

October 16, 2026|AGVP Advisory:

At a recent meeting of municipal analysts in New York, a question was asked about whether there was adequate disclosure in municipal bond issuer official statements regarding extreme weather impacts and resiliency. There was a discernable snickering from the audience which made it clear the answer to the question is no. 

The issue is not whether climate change is real as the current US President suggests that for example cold snaps need "a little of that old fashioned global warming right now". The issue is whether communities have resiliency plans to mitigate the financial and public safety impacts from extreme weather. And for investors, clear information about the risks and the work on resiliency plans

There have been plenty of examples of extreme weather and impacts on municipal finances from Hurricane Maria and the bankruptcy of the Puerto Rico Electric Power Authority (PREPA); to the recent western wildfire credit impacts including close to 100 S&P rating downgrades, to Moody's strong research on significant insurance protection gaps from flooding that end up straining public sector finances. 

There are numerous factors that explain why little on extreme weather and resiliency plans are disclosed in financing documents. From the lack of regulatory requirement; the boilerplate language on extreme weather to protect the issuer from legal liability; to the uncertainty about the when and how of an impact from extreme events. 

CERES reports 33% of the 60 sampled bond offering statements of municipal issuers in the US included no reference to climate or extreme weather risks and 88% had no quantifying metrics or targets; and disclosures look backward, instead of reviewing exposure and resilience to future events. See Ceres August 2026 report on Can Investors Price the Risk?  

In summary, upfront disclosure of extreme weather impacts and the extent of a community's resiliency plans would better protect municipal credit and provide investors the information needed to make informed decisions.  

Dan Aschenbach

AGVP Advisory at 

[email protected]