The glossary provides more information on some of the key terms we use on MyFairMoney. It also describes criteria, methods and data sources in more detail. This will help you dive deeper into the topic of sustainable investment!
Climate risks are understood as consequences of climate change that have the potential to affect businesses, industries and entire economies. There are five key areas of business risk associated with climate change.
- Regulatory risks - arise from future legislation that affects companies' activities and possibly their business models.
- Physical risks - materialize for companies through rising sea levels or damage and loss of production due to extreme weather.
- Legal disputes - become relevant for companies through potential liability for climate damage.
- Competitiveness - reduced by new, efficient production methods and products.
- Reputation - can be at risk for companies due to scandals and controversies surrounding environmental protection and climate friendliness and the associated decline in sales.