True or False: Lower intensity impacts generally have a severe effect on a company's financial statements or cost of capital.

The assertation that lower intensity impacts generally have a severe effect on a company's financial statements or cost of capital is false. Lower intensity impacts are usually characterized by their minimal or negligible influence on a company's operational and financial performance. When assessing the effect of sustainability-related factors, those with lower intensity typically do not result in significant financial repercussions.

Financial statements reflect various elements, including revenues, expenses, assets, and liabilities. If environmental or social impacts are minimal, they are less likely to materially affect these elements. Consequently, the cost of capital, which is influenced by perceived risks and the potential for returns, would also remain stable, as investors may not view low-intensity impacts as a risk requiring compensation through higher expected returns.

In some cases, the relationship between impacts and financial performance may depend on the sector, but generally, low-intensity impacts do not carry the same weight as more significant or high-intensity sustainability issues that could dramatically alter a company's financial landscape. Therefore, asserting that lower intensity impacts create severe effects on financial statements or cost of capital is inaccurate, supporting the option that the statement is false.