This report does not constitute a rating action. Germany’s physical climate risk profile is shifting. Rising temperatures and changing precipitation patterns are projected to drive more frequent and extreme weather events, including heatwaves, heavy rainfall, droughts, and storms, as well as potentially compound exposures. These trends pose growing risks to the economy, public infrastructure, and households, in S&P Global Ratings’ view. According to S&P Global Energy’s Physical Climate Risk dataset, most German subsovereigns will see increased exposure to climate hazards over the next decade. Under a slow transition scenario (SSP3-7.0), physical climate risks are projected to worsen through to the 2050s (see Appendix for more details on the approach and the dataset). Chart 1 Climate change is expected to increase
