Investors are faced with both physical and transition risks as a result of climate change, with both of these affecting the value of investments. Acute and chronic risks are divided into acute and chronic risks, with acute risk referring to the challenges faced by companies and society due to climate change, such as unexpected damage from extreme weather events or the depletion of natural resources, and transition risks referring to changes in regulation, technology, and consumer behaviour resulting from the transition to a lower-carbon economy.