The impact of climate change on national spending on disaster recovery and climate change mitigation and adaptation projects can result in materially increasing sovereign debt risks. Emerging market countries are particularly vulnerable, as they often lack capital or incur higher funding costs, which intensifies the risks that they already face. For example, many of these countries are vulnerable to food insecurity from both the impact of climate change on their own agricultural production and higher prices for imports. Our investment team is working towards gaining a more comprehensive understanding of environmental risk in sovereigns and its interconnection with fiscal and monetary conditions.