Climate Risk Isn’t Coming—It’s Here .

In 2024, the U.S. experienced 27 separate natural disasters, each exceeding $1 billion in losses. These weren’t isolated events—they’re part of an accelerating pattern of climate disruption. For state and local governments, often the “first responders” to these impacts, the challenge isn’t just physical resilience. It’s financial.

As climate volatility increases, so does investor attention on the $4 trillion municipal bond market. Recent credit downgrades tied to the Los Angeles wildfires reflect a shifting landscape. Climate risk is no longer a theoretical factor in credit analysis—it’s a material one. The question is no longer if it will affect bond performance, but how well you’re prepared to reduce the capital costs through risk mitigation and management. 

Part of the challenge has been disclosure of climate-related risks by public sector issuers.  Ceres just published "Leading with Transparency: A Guide to Strengthening Climate Disclosure and Resilience in the Municipal Bond Market" which offers insight into how a municipality or municipal utility can rise above the pack and be seen as a leader. 

Currently public finance disclosure for these risks is inconsistent, lightly regulated, and in many cases, missing entirely. This information gap makes it harder for investors to make informed decisions and lack of transparency limits access to favorable capital for issuers working to fund resilience improvements.

In response, Ceres is pointing out the trend in GASB accounting disclosures.  They argue that public organizations will benefit from getting ahead of the curve with more and better risk disclosure — not as regulatory box-checking, but as strategic positioning. Issuers that clearly communicate their climate risk and preparedness will stand to benefit with lower borrowing costs, increased investor confidence, and a stronger narrative in the face of mounting hazards.  material impacts to the valuation of assets and liabilities.  The report specifically highlights General Accounting Standards Board requirement that any loss that is financially material to the entity, including climate-related losses, be accurately reflected in financial statements, through material impairment of asset (GASB 42 and GASB 72), “going concern” (GASB 56), asset retirement obligation (ARO, GASB 83), claims and judgments (GASB 10), investment valuation (GASB 40), and environmental remediation and obligations (GASB 49). 

At Athena Intelligence, we help utilities and public finance professionals move beyond outdated or reactive wildfire models. Only 1 in 16.4 wildfires becomes catastrophic. The key is knowing where those catastrophic events are likely to occur—before they happen.

That’s what we do.

Our geospatial intelligence platform can pinpoint high-risk ignition zones a full year in advance, with spatial resolution granular enough to inform everything from vegetation management plans to bond disclosures. For municipal issuers, that means stronger defensible risk narratives. For investors and portfolio managers, it’s the difference between owning risk and avoiding it.

Wildfire is the only natural disaster that can still be prevented with the right data. And in an era when natural hazards are rewriting credit risk models, that prevention isn’t just good policy—it’s a financial imperative.

If you’re managing public funds or going in front of utility regulators, ask yourself: How strong are your Risk to Financial Impact models?

Investors in municipal bonds are asking themselves: Where are the landmines in my portfolio?

Let’s talk about targeted mitigation and Risk Spend Efficiency Reporting before your organization has a downgrade.