The long-term impacts of climate change are widespread and difficult to predict. However, we expect to experience climate-related impacts to the business, likely driven by risks related to the physical impacts to our operations and risks related to the transition to a lower-carbon economy. Our properties may be subject to nearer-term impacts from climate change, including physical damage resulting from adverse or extreme weather. Property damage results in increased costs for repairs and may cause disruptions in operations. Transitional risks associated with climate change may cause social and human effects such as shifts in populations, increased costs for critical services such as transportation, and other adverse effects. Climate-related laws and regulations may impose costs, including increased spend associated with carbon pricing mechanisms, data gathering and reporting, third-party attestations, capital expenditures to implement lower greenhouse gas emissions technology, and other measures to reduce emissions. Additionally, the varied timing of climate-related laws and regulations and disparate regulatory approaches in various jurisdictions could complicate our compliance with climate-related laws or regulations, and methodologies for reporting climate-related data may change. We cannot predict the potential impact on our competitive position, results of operations, or financial condition. These factors may negatively impact cost or availability of certain products, commodities, or energy, and could impair our ability to secure goods and services required for the operation of our business at quantities and levels we require. A shift in customer or consumer preference towards low-carbon products and services may also place us at a competitive disadvantage if we fail to effectively adjust for these shifts. Our supply chain is subject to these same physical and transitional risks.
Events outside of our control also have, and will continue to, adversely impact our operations and financial results. These events include those related to public health crises, including epidemics or pandemics; geopolitical events or tensions, including civil unrest, trade wars, armed conflicts, or terrorism; or unstable international governments and legal systems. Among other potential affects, these events may have a disruptive and unpredictable impact on our operations and those of our suppliers and vendors, or customers, hinder manufacturing and
transportation, result in significant excess costs, lead to shifts in customer demand, or have a negative impact on capital markets. Such events are inherently unpredictable, and our responses may involve the implementation of measures which may not be as successful as intended in mitigating adverse impacts.
Industry & Economic Risks