Last fall, after a trio of deadly hurricanes, ratings companies warned vulnerable coastal cities to get ready for climate change — or face higher borrowing costs on the $3.9 trillion municipal bond market. Climate advocates cheered, hoping the prospect of downgrades would push local officials to better protect their residents from the effects of global warming.

Twelve months, two catastrophic storms and thousands of credit ratings later, those companies have yet to downgrade a single city because of climate change. The companies, which include Moody’s Corp. and Fitch Ratings Ltd., say that’s because cities are taking steps to protect themselves.

“If we look at our rating universe, a huge percentage of them are actually taking resilience measures,” Lenny Jones, a managing director at Moody’s, said. “In the AA category and above, it’s like 100 percent.”

Some investors and policy experts dispute the idea that the municipalities have done enough to protect themselves from the storms, flooding and other risks of a warming planet to warrant the high ratings. They argue that bond downgrades are the real test of whether ratings companies account for climate risks.

“Words are cheap,” said Roy Wright, who ran risk mitigation for the Federal Emergency Management Agency until April, and now heads the Insurance Institute for Business & Home Safety. “I don’t know how anyone can look at the last two years of catastrophic damage from severe weather in communities all across America and suggest with a straight face that we have our risks under control.”

Big storms can do measurable damage to a city’s tax base and therefore its ability to pay back bonds. By contrast, gauging the effects of chronic problems such as sea-level rise, flooding and more severe storms is more challenging; vulnerable areas could see property values fall, residents and businesses leave and infrastructure costs rise. But the pace and scope of those shifts are hard to predict.

Even so, over the past year ratings companies have increasingly argued that those challenges are real, and have pledged to account for them in their analyses.

“It is important to consider the current long-term credit implications of the physical impact of climate change,” S&P Global Inc. wrote last October. Those impacts went beyond extreme weather events, to include “more gradual changes to the environment affecting land use, employment, and economic activity that support credit quality.”

For cities vulnerable to those risks, S&P cautioned, failing to address them “would be a credit negative.”

The next month, Moody’s released a similar paper, followed by Fitch this May. Each report carried a version of the same message: Ignoring the future risks of climate change, and failing to become more resilient to those risks, would imperil a city’s creditworthiness.

“What we want people to realize is: If you’re exposed, we know that,” Jones, with Moody’s, told Bloomberg News last fall. “That’s taken into your credit ratings.”

A year later, no cities or counties have been penalized for failing to heed those calls. That’s despite warnings from disaster experts about the widespread failure of local governments to meaningfully prepare for the growing risks of global warming. Meanwhile, many of the cities and counties most exposed to the effects of climate change have received perfect ratings over the past year.

In May, Fitch and Moody’s both issued triple-A ratings to Wilmington, North Carolina. Four months later, Wilmington, which was flooded by Hurricane Matthew in 2016, was inundated again by Hurricane Florence, causing more than $250 million in damage and leaving the city inaccessible by car, boat or plane. That same month, S&P and Moody’s gave AAA ratings to Boston, which the World Bank calls one of the 10 cities worldwide that are most financially exposed to flooding. S&P acknowledged the threat climate change poses to Boston, but added that the city has released a study that “outlines the plan for mitigating potential weather-related threats.” In August, Moody’s and Fitch gave AAA ratings to Ocean County, New Jersey, which according to the research group First Street is home to the zip code that has lost more in relative property value than anywhere else in the country because of increased tidal flooding.

In September, Moody’s and S&P issued perfect ratings to Palm Beach, Florida, a narrow barrier island where $1.3 billion in property value is less than two feet above sea level, according to data from Climate Central, a Princeton-based research group. Regular flooding is getting worse, and no point is more than seven feet above the ocean. Last November, all three companies issued perfect AAA ratings to Charleston County, South Carolina, where flooding is so frequent that the Charleston City website includes a page titled “Why does it seem like Charleston always floods when it rains?”

Kurt Forsgren, a managing director at S&P, said the company incorporates climate change into its evaluations. “For those communities that are exposed, we are asking the kind of questions that you’d expect us to ask about long-term risk and mitigating it,” he said.

Executives at Fitch said that among the 1,000 or so local governments they rate across the country, officials are preparing for climate risks.

“We have not seen this sort of demonstrated management weakness or lack of attentiveness to this issue where it matters most,” said Michael Rinaldi, a senior director at Fitch. “If there were a situation where the risks were quantifiable and obvious, we would certainly not sit back and avoid taking rating action.”

Last month, however, FEMA Administrator Brock Long berated local officials around the country for failing to prepare for extreme weather.

“Until we get building codes passed at local and state levels that are meaningful, then we’re going to continue to see a lot of damage and destruction,” Long said during a press conference in October. “If you want to live in these areas, you’ve got to do it in a more resilient fashion.”

Community Investment in Climate Change Resilience Falling Short

Investors and policy experts likewise rejected the rating companies’ assertion that cities are getting ready for the effects of global warming.

“I haven’t seen that,” Eric Glass, who manages AllianceBernstein LP’s $400 million municipal-impact portfolio, said in an interview. He said that aside from a handful of cities such as New York, San Francisco and Houston, few communities are making meaningful investments to protect their residents.

“It’s just not true,” added Colin Sullivan, chief operating officer of risQ Inc., a company in Cambridge, Massachusetts, that measures municipal climate risk for investors.

“It doesn’t resonate with my experience at all,” said Shalini Vajjhala, a former Obama administration official and founder of Re:Focus Partners, which works with cities to prepare for extreme weather. “Many cities have developed essential plans and strategies, but far fewer have actually measurably reduced risk.”

Others said it wasn’t surprising that the companies have yet to account for climate change, despite their promises.

“Our view is that the rating agencies have not incorporated climate change in their ratings yet,” said James Lyman, director of research, municipal fixed income for Neuberger Berman Group LLC. “To be fair, rating agencies in general have a difficult time basing ratings on potential outcomes that are far in the future.”

Adam Stern, senior vice president and co-head of credit research at Breckinridge Capital Advisors, Inc., likewise sympathized with the challenges that rating companies face with incorporating climate risks.

“The negative impact of climate change, to the extent it affects some issuers, is very hard to quantify,” Stern said by email. “For that reason, the rating agencies are likely to move slowly with downgrades, and when they eventually begin to downgrade issuers, it’s likely going to be for a pretty extreme failure to acknowledge and/or address the risks.”