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Educational modules

Module 4 Climate-related transition risks

Module 4 focuses on explaining climate-related transition risks and how they may affect your entity. Climate-related transition risks arise from the efforts to transition to a lower-carbon economy, not from the direct physical impacts of climate change. Transition risks include policy, legal, technological, market and reputational risks.

What will I learn?

The module begins with an overview of what climate-related transition risks are. You will learn how these risks can arise, what types of financial and operational impacts they may cause, and how different forms of transition risk often interact with each other.

The module then explores the policy and regulatory context at national, state and territory levels, as well as the climate commitments of Australia’s major trading partners. It concludes with a series of hypothetical but realistic case studies illustrating policy, market, legal, technology and reputational risks, and the ways these could transmit through value chains to impact entities of all sizes.

Learning outcomes

By the end of this module, you will be able to:

  • explain what climate-related transition risks are and how they differ from climate-related physical risks
  • identify some categories of transition risk and how they can affect operations, strategy and financial performance
  • outline key Australian national, state and territory decarbonisation policies, and the climate commitments of Australia's major trading partners
  • assess how transition risks may arise in your own entity or value chain, using case study insights to inform your understanding.

Module structure