Climate change is a long-term risk associated with high uncertainty regarding timing, scope and severity of potential impacts. The risks for insurers can be grouped into physical risks and transition risks. Physical risks relate to losses from climate trends (i.e. changing weather patterns and sea level rise) and climate events (i.e. extreme weather and natural disasters). These physical risks impact property & casualty (P&C) insurance, but also life insurance, for instance through higher than expected mortality rates. Losses can also follow from credit risk and collateral linked to the mortgage portfolio. Aegon is exposed to mortality risk and mortgage underwriting risks and has limited exposure to P&C risk, including catastrophic risk. Beyond insured losses from physical climate damages, climate change can increase uninsured damages and losses and may have disrupting and cascading effects on the wider economy and across the financial system. The second category of risks is associated with the transition to a low-carbon economy. These transition risks can affect the value of assets and impact the investments portfolios of insurers. Furthermore, it cannot be ruled out that Aegon itself is unable to adjust to environmental and sustainability goals. The transition risks are determined by largely uncertain factors such as policy and regulatory changes, political, social and market dynamics and technological innovations. Linked to both the physical and the transition risks, there could be litigation and reputational risks following from not fully considering or responding to the impacts of climate change, or not providing appropriate disclosure of current and future risks. The risks can relate both to Aegon and the companies in which it invests.