APRA Releases Results of Climate Risk Survey on Regulated Entities
APRA published an information paper that presents the results of its first climate risk survey on regulated entities. The paper takes stock of actions and initiatives underway in Australia and internationally in response to the growing awareness of physical, transitional, and liability risks of climate change. APRA also announced that it will increase its scrutiny of how banks, insurers, and superannuation trustees are managing the financial risks of climate change to their businesses.
APRA surveyed 38 large banks, insurers, and superannuation trustees, last year, to assess their views and practices on climate-related financial risks. The survey found that a substantial majority of the regulated entities were taking steps to increase their understanding of the climate change risk. Other key findings include the following:
- A third of the respondents believed that climate change is a material financial risk to their businesses and a further half thought it would be in future.
- Majority of the banks considered climate-related financial risks as part of their risk management frameworks.
- Reputational damage, flooding, regulatory changes, and cyclones were nominated as the top climate-related financial risks.
Respondents also described the strategic opportunities they had identified from the transition to a low-carbon economy, including developing innovative products and services, and meeting the growing demand for green investment opportunities.
Related Links
Keywords: Asia Pacific, Australia, Banking, Insurance, Pension Funds, Climate Risk Survey, Risk Management, Climate-Related Financial Risk, APRA
Previous Article
ESRB Publishes Report on Macro-Prudential Approaches to NPLsRelated Articles
APRA Issues Interim Update to Policy Priorities for 2021 and Beyond
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
EC Adopts Solvency II and Resolution Rules Package for Insurers
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
OCC Issues Booklets on Regulatory Reporting and Earnings
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
ECB Sets Out Results of Economy-Wide Climate Stress Tests
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
EBA Examines Implications of Increasing Use of Digital Platforms in EU
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
