APRA warns of ‘irreversible’ climate risk
By
Lachlan Maddock
22 April 2021
The prudential regulator has warned businesses that they must work quickly to understand “the unprecedented nature of climate change” if they want to avoid havoc in the financial system.
APRA has urged businesses to recognise climate risks as different from those they’ve faced in the past, warning that a “strategic approach” is necessary for managing “the potential for irreversible changes in climate, leading to impacts that may not be easily mitigated or reversed”.
“Since the Australian Government became a party to the Paris Agreement, APRA has been raising awareness of climate-related risks to the financial sector. Given the unique and long-term nature of the risks, however, processes to measure, monitor and manage climate-related financial risks are still developing,” said APRA chair Wayne Byres.