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 faced by companies and society as a result of climate change, such as sudden damage from extreme weather events or the depletion of natural resources in the long run. Transition risks are related to changes in regulation, technology, and consumer behaviour that occur during the transition to a lower-carbon economy.