Which of the following is an example of business risk related to climate change?

Loss of investors is a significant business risk related to climate change. As stakeholders increasingly focus on sustainability and ethical practices, companies that fail to address climate-related issues may find themselves losing investor confidence. This loss can stem from concerns about long-term viability, regulatory compliance, or potential reputational damage stemming from environmental impact. Investors are becoming more vigilant, often incorporating environmental, social, and governance (ESG) criteria into their investment decisions. Consequently, a firm that does not proactively manage its climate risk may not only face declining stock prices but also a rising cost of capital as they struggle to attract new investments.

The other options, while they may have implications in a broader business context, do not illustrate risks associated with climate change in the same way. Increased product demand might result from a shift towards more sustainable practices, signifying an opportunity rather than a risk. Similarly, higher employee satisfaction can be seen as a positive outcome of improved workplace conditions associated with sustainability initiatives, and reduced operational costs can be a benefit of implementing energy-efficient practices. In contrast, the loss of investors represents a direct financial threat linked to climate change that must be managed proactively.