Climate change risk index and municipal bond disclosures of United States drinking water utilities

Climate change increases risks to the operations and financial reliability of drinking water utilities across the United States (US). Here we develop a comparative climate risk index that includes hazard, vulnerability, and exposure components for 1455 medium and large municipal US drinking water utilities. We find that 67 million customers are serviced by utilities with higher climate risk. Drinking water utilities in the Western US have higher risk due to expected large changes in climate hazards, while utilities in the Northeast and Midwest have higher risk due to existing vulnerabilities and exposure. We use this climate risk index, along with an analysis of municipal bond official statements, to identify utilities in need of climate adaptation and resilience planning. Of the analyzed bonds, 36% were issued by high risk utilities and didn’t mention climate change. This work offers recommendations for multiple decision-makers, including utility customers, bond purchasers, and government agencies. 67 million customers across the US rely on drinking water utilities that face higher climate risk than accounted for, which exposes major gaps in climate adaptation and resilience planning, suggests an assessment of vulnerability, exposure, and hazards across 1,455 municipal utilities.