Topic: Lifecycle Emissions and Financial Risk

"Lifecycle Emissions and Financial Risk" refers to the assessment of greenhouse gas emissions produced at every stage of a product’s or project’s existence—from raw material extraction, manufacturing, and use, to disposal. Understanding these lifecycle emissions is crucial for investors and companies because they reveal the total environmental impact and potential regulatory exposure. High lifecycle emissions can translate into increased financial risks, including carbon pricing costs, regulatory penalties, and reputational damage. Additionally, as governments implement stricter climate policies to meet net-zero targets, assets with higher embedded emissions may face asset stranding—where they lose value or become obsolete. This creates risks for lenders, insurers, and investors who may suffer financial losses. Therefore, integrating lifecycle emissions data into financial risk assessments helps stakeholders make informed decisions, promote sustainable investments, and support the transition to a low-carbon economy. By aligning capital flows with climate goals, it also encourages companies to innovate and reduce emissions throughout their value chains.