Climate Risk Update: Regulators in ‘lock-step on climate change’

Australia’s financial regulators continue to step up their leadership on climate change. Three key developments in August 2019 built on CPD’s research and series of landmark public statements on climate risk that we hosted in the last two years.

Australia’s corporate regulator ASIC issued comprehensive Updated Guidance on Climate-Related Disclosure on how companies should report climate-related risks to their operations, highlighting the critical role of the global Taskforce for Climate-related Financial Disclosures framework.

In a speech outlining Risks to the Outlook for Australia’s economy, Reserve Bank Deputy Governor Dr Guy Debelle emphasised the long-term material risk of climate change for Australia’s economy, reinforcing the key messages from his speech at CPD’s public forum on climate and the economy earlier in 2019.

In addition, in a speech titled ‘Reflections on a changing landscape’, APRA Chairman Wayne Byres said:

“We are now in a world where climate-related financial risks need to be assessed and addressed alongside more traditional balance sheet and operational risks”

And in another connection to CPD’s work in this area, he spoke of a growing understanding that directors’ duties require boards to be cognisant of the climate risks to which their business is exposed.

As The Australian noted last month, while climate policy remains deadlocked, our financial regulators are now in lock-step in highlighting the risks, obligations and opportunities stemming from a zero-carbon transition.

CPD’s Policy Director Sam Hurley spoke about the implications for leadership and directors’ duties at our public forum earlier this year. Our CEO Travers McLeod also discussed the updated legal opinion on directors’ duties and climate change with the ABC’s Peter Ryan.