APRA initiates survey on climate financial risks

APRA initiates survey on climate financial risks

APRA initiates survey on climate financial risks | Insurance Business Australia

Insurance News

APRA initiates survey on climate financial risks

Survey’s 2024 iteration is open to broader audience

Insurance News

Roxanne Libatique

The Australian Prudential Regulation Authority (APRA) is gearing up to release a new survey focused on how its regulated entities are tackling the financial challenges posed by climate change.

This initiative builds on the groundwork laid by the 2022 climate risk self-assessment survey. The primary aim is to sharpen the understanding of both APRA and the regulated entities about the strategies implemented to confront climate-related financial risks.

The upcoming survey benchmarks against APRA’s Prudential Practice Guide CPG 229 Climate Change Financial Risks, released on Nov. 26, 2021, as a key reference point.

APRA’s 2024 climate risk self-assessment survey

Unlike the initial survey, which was limited to Tier 1 and Tier 2 entities, the 2024 iteration will be open to a broader audience, including all entities in the insurance, banking, and superannuation sectors that fall under APRA’s oversight. The insights gleaned from this survey are anticipated to broaden APRA’s perspective, given the application of the CPG 229 guidance across a wide array of entities.

The survey’s design aims to closely examine how entities’ current strategies for managing the financial implications of climate change align with the expectations outlined in APRA’s CPG 229 guidance.

Featuring a mix of multiple-choice and open-ended questions, the survey encourages participants to provide detailed responses, making the process both efficient and comprehensive. By maintaining several questions from the 2022 survey, APRA intends to ensure continuity and assess progress over time. Additionally, the inclusion of new questions aims to capture insights on evolving policies, emerging challenges, and specifically, strategies concerning nature risk and transition planning.

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APRA 2024 climate risk self-assessment survey process

Invitations to participate in the survey will be extended to all entities within the insurance, banking, and superannuation sectors regulated by APRA.

Participants will be given a six-week period to submit their responses via an online questionnaire. Following the survey’s conclusion, APRA will distribute anonymised results among participants, facilitating an industry-wide comparison. This initiative not only allows entities to gauge their practices against their peers but also contributes to APRA’s broader efforts to integrate climate change financial risks into its supervisory framework.

APRA is also contemplating the potential for recurring surveys to continuously track and influence the industry’s approach to managing climate change financial risks.

Entities with inquiries about participating in the climate risk self-assessment survey are encouraged to contact their APRA supervisor for more information.

The announcement of the climate risk self-assessment survey follows the release of additional resources aimed at preparing Australian financial institutions for the implementation of the Financial Accountability Regime.

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