A stranded asset is a concept widely used in ESG and sustainability discussions. What is a stranded asset? A stranded asset is an asset that loses its value abruptly or becomes obsolete due to external changes linked to ESG or sustainability factors (regulatory changes, political changes etc...). The asset still exists, but it can no longer generate expected financial returns. Why do assets become stranded in an ESG / sustainability context? Common reasons include: • Cl

The difference between climate risk adaptation and mitigation lies in their objectives, approaches, and time horizons within climate action. They are complementary but distinct strategies, thus make sure you don't mix up both of them. 🌍 1. Climate Risk Mitigation Goal: Reduce or prevent greenhouse gas (GHG) emissions to slow down or limit future climate change . Focus: Addressing the cause of climate change. Approach: Cutting carbon emissions from energy, transport, and i

ESG transition risk is one of the most important (and sometimes misunderstood) parts of climate and sustainability risk management. Here’s a clear summary: 🌱 What is ESG Transition Risk? Transition risk refers to the financial and operational risks a company faces as the economy moves from a high‑carbon to a low‑carbon or even net‑zero future. While “physical risks” come from the direct impacts of climate change (acute or chronic: storms, floods, heat, etc.), transit

Answer is definitely YES... Environmental, Social, and Governance ( ESG ) factors can create systematic risk when they affect the broader market or economy, not just individual firms. Here’s how it happens: 🧩 1. Mechanisms: How ESG Creates Systematic Risk a. Environmental (E) Climate change can lead to extreme weather events , resource scarcity, and regulatory shifts (like carbon pricing). These changes impact entire sectors (energy, agriculture, insurance) and supply cha