Climate risks

Climate change and climate variability are increasing sources of operational and financial risk for many small, medium, and large companies

Climate risks encompass both physical and transition risks. Physical risk is the business activity exposure, such as sales, production costs and assets, supply, logistics, inventories, and productivity to climate variability and extreme events, whether acute or chronic. Transition risk relates to the impact of business activity on the environment in the context of a transition to a low-carbon economy.

With climate change, climate variability has considerably risen over the past decades and is expected to continue to rise over the next twenty years, no matter how fast GHG emissions take place. This implies that companies must act to adapt.