Why do renewable power companies also have some climate risks?

Answer

Transition risks (e.g., unanticipated carbon taxes) are systematic in nature and have the potential to impact macroeconomic variables (e.g., GDP, inflation, interest rates, etc.). These macroeconomic factors, in turn, can impact all infrastructure sectors, including the renewable power sector. In addition, our research shows that renewable power assets are just as susceptible to suffering damages from climate change-related hazards (e.g., floods, storms, heat) as assets in other sectors.