Transition risks
Financial risks arising from the shift to a low-carbon economy. The TCFD typology, taken up by IFRS S2 and ESRS E1, distinguishes policy and legal risks (carbon pricing, regulation, litigation), technology risks, market risks (changing demand, input costs) and reputational risks. They can notably impair assets that become incompatible with the transition.
See also: Physical risks
Reference source: www.fsb-tcfd.org
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