From Nicolas Lancesseur,
• Identification of other potential risk transmission channels that have not been covered in this report e.g. reputational and litigation risk.
Both for transition and physical risks, only direct effects are considered at this stage from our understanding. This is mainly due to the current capacities of the models. However, considering indirect effects should be a future area of research.
An institution can be exposed to a sector that is not directly at risk from climate change or climate transition but there can be strong dependencies of this sector with other sectors/countries at risk (for instance the industrial suppliers of ICE vehicles, or users of electronic chips of which production is concentrated in an area in South-East Asia with high flooding risks, etc.).
Another field of study could be the interaction between transition and physical risks. For instance, drought risks can imply difficulties to produce electricity from nuclear or hydro sources, which could be an additional difficulty to implement transition plans. From our understanding, this kind of risks are also not covered.
krzmip
commented
2 years ago
From Nicolas Lancesseur, • Identification of other potential risk transmission channels that have not been covered in this report e.g. reputational and litigation risk. Both for transition and physical risks, only direct effects are considered at this stage from our understanding. This is mainly due to the current capacities of the models. However, considering indirect effects should be a future area of research. An institution can be exposed to a sector that is not directly at risk from climate change or climate transition but there can be strong dependencies of this sector with other sectors/countries at risk (for instance the industrial suppliers of ICE vehicles, or users of electronic chips of which production is concentrated in an area in South-East Asia with high flooding risks, etc.). Another field of study could be the interaction between transition and physical risks. For instance, drought risks can imply difficulties to produce electricity from nuclear or hydro sources, which could be an additional difficulty to implement transition plans. From our understanding, this kind of risks are also not covered.