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, which relate to the challenges that climate change brings to companies and society, such as unexpected damage caused by extreme weather events or the depletion of natural resources in the longer term. Transition risks are related to changes in regulation, technology, and consumer behaviour that the transition to a lower-carbon economy presents.