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.

LIBOR ended in September 2024.

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