JRC research reveals the interconnected nature of climate change, biodiversity loss and financial risk, paving the way for sustainable and resilient economic strategies. Climate-related financial risks arise from physical impacts climate change, such as extreme weather eventsa transition risks associated with the transition to a low-carbon economy. Transition risks arise when funds are allocated to economic enterprises that eventually become obsolete during the transition to a low-carbon economy (for example, due to changes in consumer sentiment, the introduction of green technologies, or changes in regulation). The danger is that significant physical assets, such as a coal mine, may be left abandoned or unusable during this transition — stuck —, which leads to financial losses on the investments made. Based on estimation methodology proposed by the Joint Research Centre There are around 11 % of European investors' portfolios exposed to climate change risks, compared to around 3 % of environmental exposures.