Australian regulator issues long-awaited climate risk guidance
Australia’s prudential regulator unveiled long-awaited guidance for banks, insurers and pension funds on managing and disclosing climate-related risks, including physical, transition and liability exposures.
Issuing a draft version for consultation, the Australian Prudential Regulation Authority (APRA) said the guidance paper did not create new requirements or obligations, but gave more clarity about its expectations.
The guide was developed in consultation with peer regulators globally and is aligned with the recommendations from the global Task Force on Climate-related Financial Disclosure (TCFD), set up by the G20 rich countries to coordinate rules.
Chair Wayne Byres said in a statement that the guide doesn’t direct or prevent APRA-regulated entities from making particular business decisions but aims to ensure decisions are well-informed and consider “risks and opportunities that the transition to a low carbon economy creates.”
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