Threats for the continent’s banks are exacerbated by their outsized holdings of sovereign bonds, particularly for Angolan and Nigerian lenders, Moody’s analysts including Malika Takhtayeva and Peter Mushangwe said in a report Tuesday. Most African sovereigns face substantial risk from rising temperatures, water scarcity and carbon transition, they said.

Here are other comments from Moody’s

• “We expect environmental factors will lead to a deterioration of the banks’ credit quality and profitability in the long term if banks do not take measures to prudently manage climate-related and environmental risks.”
• Moody’s findings indicate many of Africa’s largest industries, such as oil and gas, mining and transport face high environmental threats, given their high exposure to carbon transition or physical climate risk.
• Banks in Democratic Republic of the Congo and South Africa have engaged in extensive lending to the mining industry; banks in Uganda are heavily exposed to farming and fishing, making them vulnerable to droughts and other consequences of climate change.