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Categories of Risks and Opportunities

Updated over 5 months ago

Physical risks and transitory risks play a decisive role in the context of climate change. While Physical risks arise from direct climatic influences such as extreme weather events and long-term environmental changes, Transitory Risks and Opportunities arise from economic, regulatory and technological adjustments in the course of sustainable transformation.

Physical risks

Chronic

Acute

Increasing scarcity of key natural resources

Degradation of nature and loss of natural protection (e.g. due to clearing of vegetation for mining development) can exacerbate the severity of damage caused by extreme weather events such as hurricanes, droughts, floods and storms

Ecosystem degradation due to actions such as deforestation

Loss of species and degradation of ecosystems (e.g. loss of connectivity between species' ranges, disruption of flyways or marine migration corridors) due to spills or accidental discharges (e.g. oil) that contaminate air, Soil and water bodies by the organization itself or by other stakeholders in the same area

Acidification of the oceans

Diseases or pests affecting the species or variety of crop on which the organization relies, particularly where there is a lack of or low genetic diversity

overfishing

Floods, avalanches, drought, heat waves, storms, tornadoes, etc.

Loss of land due to Desertification and Soil degradation and the associated loss of soil fertility

Species loss and degradation due to Soil, water and marine pollution caused by the organization itself or by stakeholders in certain areas

Transitory Risks

Market risks

Market Technology

Politics & law

Reputation

Increased costs for raw materials

Switch to lower-emission technologies

Carbon pricing mechanisms

Shift in consumer preferences

Changing customer behavior

Substitution of existing products and services with lower-emission options

Stricter emissions reporting obligations Regulations for existing products and services

Stigmatization of the sector

Uncertainty of market signals

Unsuccessful investments in new technologies

Changes to existing policies/new policies to achieve positive nature outcomes and Targets

Increased stakeholder concerns or negative stakeholder feedback

Shift in customer values or preferences to products (e.g. food, textiles) with lower impacts on nature

Transition to more efficient and cleaner technologies (i.e. with lower impacts on nature)

Stricter (new) legislation (e.g. trade restrictions or taxes) on activities, products and/or services that impact nature, as well as rights, permits and allocations for natural resources designed to reduce pressure on nature or impacts on local communities

Changes in Consumer sentiment towards the organization/brand as a result of poor

Brand as a result of poor nature management and/or lack of stewardship activities

Volatility or increased cost of materials

Lack of access to data or access to poor quality data making nature-based assessments difficult

Increased reporting requirements

New monitoring technologies used by regulatory authorities

Exposure to litigation arising directly or indirectly from legal claims

Transitory Opportunities

Resource efficiency

Products & DL

Market

Resilience

Utilization of more efficient transport modes

Development and/or expansion of low-emission goods and services

Access to new markets

Participation in renewable energy programs and introduction of energy efficiency measures

Use of efficient production and distribution processes

Developing solutions for climate adaptation, resilience and insurance Risks

Use of public sector incentives

Use of Recycling

Developing new products or services through R&D and innovation

Access to new assets and sites that require insurance protection

Transition to more efficient buildings

Ability to diversify business activities

Reduced Water consumption and use

Shift in Consumer preference

Use of lower emission energy sources

Further topics

This article has been machine translated. In case of errors, please contact [email protected].

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