Transition risk

1. Climate change - financial risks.

Abbreviation for climate transition risk, being financial risks that could arise from adjusting to a lower-carbon economy and net zero emissions.

In this context, financial climate transition risks are distinct from the direct physical risks of climate change.

2. Risk-free rates - LIBOR and related transitions - conduct.

In the context of risk-free rates, transition risk refers to the risks arising before, during and after the discontinuation of LIBOR and similar rates, and their replacement by other risk-free interest rates.

These transition risks arise for non-financial corporates, and for financial institutions themselves, for example in relation to conduct.

3. Other contexts.

Any risk arising in relation to any kind of transition.

See also

• Bank of England
• Climate change
• Climate transition risk
• Climate-washing
• Conduct
• Emissions
• Fallback
• Financial Conduct Authority
• Financial Stability Board
• Fossil fuel
• Net zero
• Paris Agreement
• Reputational risk
• Stakeholder
• Stranded assets
• Transition

Other resource

• Climate change - What are the risks to financial stability? Bank of England