Banks, insurers and superannuation trustees need to do more than talk the talk where climate change is concerned, with the Australian Prudential Regulation Authority (APRA) urging them to also walk the walk and act to mitigate risks to their customers.
While APRA found that many entities were increasing their understanding of the threat of climate change, it said more needed to be done to improve how organisations disclose and manage these risks in coming years.
“APRA’s views on the economic risks of climate change, recently echoed by the Reserve Bank of Australia, are consistent with those of financial regulators internationally,” APRA executive board member and chair of the United Nations Environment’s Sustainable Insurance Forum, Geoff Summerhayes, said.
“These risks are material, foreseeable and actionable now. Uncertainty over long-term impacts or policy direction is not an excuse for doing nothing.”
A survey by the regulator of 38 large banks, insurers and super trustees found that a third believed that climate change was a material risk of their business now, with a further half thinking that it would be in the future.
Respondents nominated reputational damage, flooding, regulatory changes and cyclones as the top climate-related financial risks, with most banks already considering such risks as part of their risk management frameworks.
The outlook wasn’t all bleak however, with respondents also identifying strategic opportunities in transitioning to a low carbon economy, such as developing innovative products and services and meeting the growing demand for green investment options.
BlackRock boss Larry Fink praised Australia’s superannuation system in his annual chairman’s letter.
The prudential regulator has announced it will publish new expenditure data of superannuation funds, providing details on expenses like advice, director remuneration, and payments to unions.
Affirming the UK’s growing attractiveness as an investment destination, a number of Australia’s largest investors recently joined the UK Foreign Secretary for an exclusive briefing in Canberra to discuss further opportunities for trade and growth.
The specialist superannuation law advisory practice is set to wind up, with managing partner Jonathan Steffanoni planning to bring a new offering to market.
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