What are the top 10 most significant climate-related business risks this year?

1. Physical risks due to extreme weather events: Increasing frequency and severity of hurricanes, floods, droughts, and wildfires can damage infrastructure, disrupt supply chains, and cause property damage.
2. Transition risks from policy and regulation changes: Governments implementing stricter emission regulations or carbon pricing can significantly impact industries reliant on fossil fuels.
3. Technology risks: Rapid technological advancements and shifts towards renewable energy can disrupt traditional business models, rendering certain technologies or practices obsolete.
4. Market risks: Changing consumer preferences and demand for sustainable products can affect sales and market share, particularly for companies with high carbon footprints.
5. Reputation and brand risks: Companies failing to adopt sustainable practices or involved in environmentally harmful activities risk losing public trust, facing reputational damage, and potential boycotts.
6. Financial risks from stranded assets: As the world transitions to a low-carbon economy, fossil fuel reserves could become economically unviable, leading to potential asset write-offs and stranded investments.
7. Supply chain risks: Climate impacts on suppliers’ locations, availability of raw materials, or transport disruptions can disrupt production and increase costs.
8. Litigation risks: Companies could face legal actions if their actions contribute to environmental degradation or if stakeholders claim inadequate climate risk disclosure.
9. Health and safety risks: Climate change can exacerbate health issues, causing workplace disruptions and increased healthcare costs for businesses.
10. Investor risks: Growing interest in sustainable investing means companies with unsustainable practices may face difficulties attracting investors, impacting their ability to raise capital.