Along the road, there are clearly risks, as well as opportunities: physical risks arising from the impacts of climate change, but also transition risks arising from the adjustment to a low-carbon economy. In the process, businesses may face costs, valuation losses and disruptions.
Yet, a careful and timely transition will also open up opportunities, associated with the development of new renewable energy and innovative products, investment in energy saving, new infrastructure and new jobs. The transformation of the global economy towards decarbonisation cannot but have a positive net outcome. Long-term value creation is a matter of effective climate risk management and transition to a zero-carbon economy4.