Investors are faced with both physical and transition risks as a result of climate change, both of which impact investment value. Acute and chronic risks are divided into acute and chronic risks, with the former referring to the challenges that climate change poses to companies and society, such as unexpected damage caused by extreme weather events or the depletion of natural resources, respectively, while transition risks are related to changes in regulation, technology, and consumer behaviour that the transition to a lower-carbon economy presents.