PLEA Network

29 November 2017, Geoff Summerhayes, Executive Board Member, Australian Prudential Regulation Authority. The Weight of money: A business case for climate risk resilience. Tonight will be the first time I’ve substantially addressed APRA’s thinking around climate risk since a speech I delivered to the Insurance Council of Australia in February this year. My main message then was that APRA believed many climate-related financial risks were no longer future concerns. They were “foreseeable, material and actionable now”. As the prudential regulator, APRA has a clear duty to warn the institutions we regulate if we identify risks that could threaten the interests of Australia’s financial beneficiaries or the As the prudential regulator, APRA has a clear duty to warn the institutions we regulate if we identify risks that could threaten the interests of Australia’s financial beneficiaries or the overall stability of the system. Economic sustainability – the subject of tonight’s address – refers to creating a level of resilience so the economy, and the financial institutions within in it, are well-placed to overall stability of the system. Economic sustainability – the subject of tonight’s address – refers to creating a level of resilience so the economy, and the financial institutions within in it, are well-placed to withstand the challenges they will inevitably confront. That includes new or unexpected risks; whether that be cyber-crime, technological disruption or climate risk…… The Sustainable Insurance Forum’s view, which APRA shares, is that climate change and – here’s the crucial bit – society’s responses to it – are starting to affect the global economy. APRA is not a scientific body, and I can’t say with 100 per cent conviction to what extent scientists’ predictions of increasing temperatures, rising sea levels, more frequent droughts and more intense storms will impact the Australian economy. But what I can tell you with absolute certainty is that the transition to a low carbon economy is underway and moving quickly. The weight of money, pushed by commercial imperatives such as investment, innovation and reputational factors, is increasingly driving that shift, rather than scientists or policymakers. Read More here