Climate Change

More Green Tape! APRA Tells Banks to Mitigate Climate Risk

First it was the Reserve Bank of Australia making unqualified noises about climate change. Perhaps to distract from the fallout of its lower for longer interest rate policies.

Now the boffins at the Australian Prudential Regulation Authority (APRA) have felt the need to show their green colours.

Financial institutions, after all, are surely the experts when it comes to potential climate change.

Or so APRA appears to believe, telling banks and insurers there is a ‘material, foreseeable and actionable’ risk in climate change they are expected to manage.

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Climate change an economic threat?

The world is rapidly transitioning to a low carbon economy, driven principally by the decisions of governments, business leaders, investors and consumers,’ APRA’s head of insurance Geoff Summerhayes said.

The ‘decisions’ being, of course, to get sucked in by the climate warriors’ fear campaign.

Summerhayes continued:

Companies that fail to respond to these forces risk being left behind.

Uncertainty over long-term impacts or policy direction is not an excuse for doing nothing.’

This must be the mantra that Labor’s wage referendum was founded upon…

But we digress.

As the Australian Associated Press report, APRA outlines a variety of risks that could only be a direct result of a rising global climate.

These include asset damage, supply change disturbances, and the potential for litigation if boards and directors don’t do as they’re told.

None of this would happen if the world were a few degrees cooler, apparently.

APRA want action, not just awareness

APRA’s crack down follows a survey they conducted last year of 38 different financial institutions to determine whether they were responding to the climate change threat. And it turns out, most of them were making efforts to understand the potential problem.

But understanding isn’t enough, says APRA, who ‘to see continuous improvement in how organisations disclose and manage these risks over coming years…entities can mitigate the magnitude of the impacts of these risks through action in the short term’.

As to what kind of action, well, APRA didn’t specify. But they did specify that their sentiment is shared by regulators all around the world.

Well, that’s a relief. So long as APRA is running with the herd, all must be well!

Same goes for anyone, apparently…just look at the organised child protests last week.

When will the stampede end?

Free Report: Why Australia’s three-decade, recession-free ‘miracle economy’ is nothing more than a ticking timebomb. Download now.

The Australian Tribune Editorial

The Australian Tribune Editorial

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  1. APRA ought to stick to what they were set up to do. They came out of the Hayne Royal Commission with a bloody nose. They are a mob of over paid, un-elected, shiny arsed individuals who couldn’t cut it in the real world. They can get political when they face an election for their job, not before.