The impact of climate change on national expenditures related to disaster recovery and climate change mitigation and adaptation projects can result in material risks for sovereign debt. Emerging market countries are particularly vulnerable, as they often lack capital or incur higher funding costs, which intensifies the risks 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 committed to enhancing their understanding of environmental risk and its interconnectedness with fiscal and monetary conditions of sovereigns.