What Are Climate Transition Risks? Introducing the Orbitas Lexicon

by | Jul 30, 2020

Climate Transition Risks

What are climate transitions risks? Climate transitions are the efforts undertaken to tackle climate change (directly or indirectly) through policies, commitments and changing consumer preferences and that directly or indirectly affect a company’s GHG emissions. These transitions create risks that companies or investors face from a shift to a low-carbon economy, which could manifest across different risk categories (e.g. operational risks, financial risks, reputational risks, etc.)

Why do they matter? Climate transition risks are affecting multiple industries across the global economy and altering the fundamental practices of the financial sector.

How do I understand and respond to them? At Orbitas our mission is to quantify and communicate the financial risks tied to climate transitions in the tropical commodities sector that are often overlooked. One reason for this is that the tropical commodities sector is complex and no one has ventured to provide the necessary analytical framework to answer them clearly.

These questions have increasing numbers of financial, business, and political leaders searching for clarity. We realized that this clarity must begin with terminology we use, and the core concepts our analysis rests on. And so we’ve produced the “Orbitas Lexicon”, which defines the the key terms we use in our work. We hope the lexicon will not only help make our work more accessible, but that it also serves as a resource for others as more actors start to focus on the “financial risks” of “climate transitions” in the “tropical commodities sector.” 

Click below to examine the Orbitas Lexicon, which defines the actors involved, terms of note, and tropical commodities themselves so you can better understand the full portrait of climate transition risks.


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