Climate risk refers to the potential negative impacts of climate change on assets, operations, or financial performance. It includes both physical risks (like floods or heatwaves) and transition risks (like new regulations or market shifts).
A logistics company with distribution centres in Southern Europe faces increased flood and heat risk over the next 30 years. These climate risks could disrupt operations, damage infrastructure, or affect insurance costs.
Climate risk is now central to financial, operational, and regulatory decisions. Understanding where and how these risks emerge helps organisations plan, disclose, and adapt more effectively.