Climate Risk
Climate risk refers to the potential financial or operational impact on an organisation from climate change, including physical risks (extreme weather, resource scarcity) and transition risks (regulation, market shifts).
Definition
Climate risk is typically divided into two categories: physical risk (direct impacts from climate change, such as extreme weather damaging facilities or disrupting supply chains) and transition risk (impacts arising from the shift to a lower-carbon economy, such as new regulation, carbon pricing, or shifting customer demand). Climate risk disclosure is an increasing component of frameworks like CSRD and TCFD-aligned reporting.
Why It Matters
Climate risk assessment is increasingly expected by regulators and investors as part of financial disclosure, not just sustainability reporting — treating climate impact as a material business risk rather than a separate CSR topic.
How ecolyptus Helps
While full climate risk assessment sits outside a single energy platform's scope, ecolyptus's energy cost forecasting can inform the transition-risk component, particularly around energy price volatility and carbon-pricing exposure.