Climate-related risks include both physical risks and transition risks.Climate-related risks include both physical risks and transition risks.
Climate-related transition risks are defined by IFRS S2 as being: "Risks that arise from efforts to transition to a lower-carbon economy. Transition risks include:
These risks could carry financial implications for an entity, such as increased operating costs or asset impairment due to new or amended climate-related regulations. The entity's financial performance could also be affected by shifting consumer demands and the development and deployment of new technology."