Given the sweeping global nature of climate change, climate risk and opportunity is embedded in the operations
of all companies. Some companies with significant emissions of greenhouse gases or energy use face current or
future regulatory risks, while climate change may pose a range of physical or financial risks to other firms. These
risks may include operational risk, market risk, liabilities risk, policy risk, regulatory risk, and reputational risk. In some
cases, the risks to companies may be indirect. For example, even if a company is not directly subject to regulations,
significant emissions in its value chain may still result in increased costs (upstream) or reduced sales (downstream).
Climate change also represents significant opportunities for many firms. Some companies will develop profitable
new technologies or markets as governments pursue innovative strategies to address climate change and spur
technology development.