29 November 2017, The Guardian, banks warned of ‘regulatory action’ as climate change bites global economy Australian Prudential Regulation Authority says it is quizzing companies about their actions to assess climate risks. Australia’s financial regulator has stepped-up its warning to banks, lenders and insurers, saying climate change is already impacting the global economy, and flagged the possibility of “regulatory action”. Geoff Summerhayes from the Australian Prudential Regulation Authority (Apra) revealed it had begun quizzing companies about their actions to assess climate risks, noting it would be demanding more in the future. Apra also revealed it has established an internal working group to assess the financial risk from climate change and was coordinating an interagency initiative with the corporate watchdog Asic, the Reserve Bank of Australia (RBA) and federal Treasury to examine what risks climate change was posing to Australia’s economy. In February, Summerhayes put banks, lenders and insurance companies on notice, urging them to start adapting to climate change and warning that the regulator would be “on the front foot on climate risk”. Now, in the first significant update to Apra’s thinking on the topic since that speech, Summerhayes said Apra’s view was that climate change and society’s response to it “are starting to affect the global economy”. In an extended version of a speech to the progressive Centre for Policy Development, and circulated to journalists ahead of its delivery, Summerhayes said a shift occurring in the global economy was increasingly being driven by commercial imperatives – investments, innovation and reputational factors – rather than what scientists or policymakers are saying or doing. Read More here
Tag Archives: Economy
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 … Continue reading →
28 November 2017, Moody’s Investor Service, The growing effects of climate change, including climbing global temperatures, and rising sea levels, are forecast to have an increasing economic impact on US state and local issuers. This will be a growing negative credit factor for issuers without sufficient adaptation and mitigation strategies, Moody’s Investors Service says in a new report. The report differentiates between climate trends, which are a longer-term shift in the climate over several decades, versus climate shock, defined as extreme weather events like natural disasters, floods, and droughts which are exacerbated by climate trends. Our credit analysis considers the effects of climate change when we believe a meaningful credit impact is highly likely to occur and not be mitigated by issuer actions, even if this is a number of years in the future. Climate shocks or extreme weather events have sharp, immediate and observable impacts on an issuer’s infrastructure, economy and revenue base, and environment. As such, we factor these impacts into our analysis of an issuer’s economy, fiscal position and capital infrastructure, as well as management’s ability to marshal resources and implement strategies to drive recovery. Extreme weather patterns exacerbated by changing climate trends include higher rates of coastal storm damage, more frequent droughts, and severe heat waves. These events can also cause economic challenges like smaller crop yields, infrastructure damage, higher energy demands, and escalated recovery costs. Read More here
13 November 2017, Carbon Brief, Analysis: Global CO2 emissions set to rise 2% in 2017 after three-year ‘plateau’. Over the past three years, global CO2 emissions from fossil fuels have remained relatively flat. However, early estimates from the Global Carbon Project (GCP) using preliminary data suggest that this is likely to change in 2017 with global emissions set to grow by around 2%, albeit with some uncertainties. Hopes that global emissions had peaked during the past three years were likely premature. However, GCP researchers say that global emissions are unlikely to return to the high growth rates seen during the 2000s. They argue that it is more likely that emissions over the next few years will plateau or only grow slightly, as countries implement their commitments under the Paris Agreement. 2017 emissions likely to increase The GCP is a group of international researchers who assess both sources and sinks of carbon. It has published an annual global carbon budget report since 2006. Its newly released global carbon budget for 2017 provides estimates of emissions by country, global emissions from land-use changes, atmospheric accumulation of CO2, and absorption of carbon from the atmosphere by the land and oceans. Read More here