Featured Product

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    August 04, 2022

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    The voluntary survey, issued in March 2022, was designed to provide insights into how APRA-regulated entities are aligning their practices with the expectations set out in prudential practice guide on climate change financial risks (CPG 229). Released last November, CPG 229 provides APRA-regulated entities with guidance on managing the financial risks and opportunities that may arise from a changing climate. The responses to the survey, from 64 medium to large institutions, suggest APRA-regulated entities are generally aligning well to APRA’s guidance, especially in the areas of governance and disclosure. Climate risk, however, remains an emerging discipline compared to other traditional risk areas, with only a small portion of survey respondents indicating that they have fully embedded climate risk across their risk management framework. Other key observations based on the entities’ self-assessments include:

    • Four out of five boards oversee climate risk on a regular basis, while just under two-thirds of institutions (63%) have incorporated climate risk into their strategic planning process.
    • Almost 40% of institutions said climate-related events could have a material or moderate impact on their direct operations.
    • Institutions consider that they have moderate vulnerability to both physical and transition risks under a high-risk scenario, and they consider these risks to be within an acceptable range for the institution’s current risk appetite.
    • Nearly three-quarters of institutions (73%) said they had one or more climate-related targets in place, however 23% of institutions do not have any metrics to measure and monitor climate risks.
    • Over two-thirds of institutions (68%) said they have publicly disclosed their approach to measuring and managing climate risks, with 90% of those aligning their disclosure to the Taskforce for Climate-related Financial Disclosures (TCFD) framework.

    While the responses overall indicated broad alignment with CPG 229 across the industries, there are areas for improvement at both industry and individual institution levels. The insights from the survey responses will be integrated into supervisory activities in accordance with APRA’s risk-based supervision model. APRA expects institutions to evolve their climate risk management practices in response to developments in climate-related science, data, and stakeholder expectations. A future survey of this kind will be considered as a tool to monitor how APRA-regulated institutions are evolving their approach over time. APRA will be seeking to develop additional tools to evaluate climate-related financial risks and increasing its scrutiny of institutions’ progress in addressing the impact of climate risk.


    Related Links

    Keywords: Asia Pacific, Australia, Banking, Climate Change Risk, ESG, Insurance, CPG 229, Disclosures, TCFD, Climate Risk Survey, Governance, APRA

    Featured Experts
    Related Articles

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521