For each material climate-related risk, is it considered a physical risk or a transition risk?

1. Material Climate-Related Risks Definition of Material Climate-Related Risks: Material climate-related risks are those risks that could significantly affect the company’s operations, financial performance, or long-term viability as a result of climate change. These risks are generally categorized into physical risks and transition risks. Identification of Material Risks: The company should identify the key climate-related risks that have been assessed as material, meaning they are likely to impact the business, its assets, or its stakeholders in a significant way. This could include risks linked to physical climate change impacts (e.g., extreme weather events) or risks from the transition to a low-carbon economy (e.g., changes in regulations or consumer preferences). 2. Explanation of Whether the Risk is Physical or Transition Risk Climate-Related Physical Risks: Physical risks refer to the direct and indirect impacts of climate change on the company’s operations or assets. These can be further divided into: Acute Physical Risks: Risks arising from extreme weather events, such as hurricanes, floods, wildfires, or heatwaves, which may disrupt operations or cause damage to infrastructure. Chronic Physical Risks: Long-term changes in climate patterns, such as rising temperatures, water scarcity, or sea-level rise, which can affect operations, supply chains, and the company’s ability to function in certain regions. For each physical risk identified, explain: How the acute or chronic impacts of climate change could affect the business in terms of operational disruption, asset damage, or supply chain vulnerabilities. Climate-Related Transition Risks: Transition risks refer to risks associated with the shift toward a low-carbon economy and the transition to sustainable business practices. These risks include: Regulatory risks: Risks related to new climate regulations, such as carbon pricing, emissions targets, or restrictions on fossil fuel use. Market risks: Shifts in consumer demand towards sustainable products and services or changes in market value related to carbon-intensive industries. Technology risks: The need to invest in low-carbon technologies or face obsolescence due to advances in sustainable innovation. Reputation risks: Risk of damage to the company’s reputation from not adopting climate-friendly practices or from being associated with high-carbon industries. For each transition risk identified, explain: The potential regulatory, market, or technology shifts that could influence the company’s operations, pricing, or competitive positioning. 3. Reporting Format For each material climate-related risk identified, provide: A description of the risk (e.g., "Impact of increased flooding due to rising sea levels on production facilities"). A classification of the risk as either physical or transition risk. The potential impact of the risk on the business (e.g., operational disruptions, regulatory costs, loss of market share). An assessment of the likelihood and time horizon over which the risk might manifest (e.g., short-term, medium-term, long-term). https://xbrl.efrag.org/e-esrs/esrs-set1-2023.html#890