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This report looks at what is driving the heightened risk environment and how most companies are vulnerable to climate-related risks in some way, even if they are not in the energy sector or other carbon-intensive parts of the world economy. The report examines the risks faced by businesses and their boards in three main areas.

• Physical risks are those that might impact businesses of all kinds as climate change-related events lead to physical damage to business property, assets or supply chains.
• Transition risks are those that arise as the worldwide shift to a low or zero carbon economy impacts the finances and valuations of organisations and asset portfolios.
• Liability risks are faced by those alleged to be responsible for (as an example) contributing to climate change, or failing to avert, minimise or report on physical or transition risks

In its analysis of the liability risks faced, the report looks at current trends in climate change litigation which include an increase in product liability claims brought by activists, states and cities against oil majors which are passing through the courts, especially, but not exclusively, in the United States.

The report also looks at how the risks associated with climate change have for a long time impacted insurers and will continue to do so as weather-related perils become more severe and more common. It also considers the crucial part that insurance has to play in mitigating the impacts of climate change and helping build resilience to it.

This is the first of three reports being launched in the coming months which delve further into the risks faced by businesses and their boards.