Australia's financial regulator has put the country's banks, insurers and lenders on notice. They have to factor climate change risks into their financial dealings or the regulator will intercede.
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”.
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.
“Apra is not a scientific body and I can’t say with 100% conviction to what extent scientists’ predictions of increasing temperatures, rising sea levels, more frequent droughts and more intense storms will impact the Australian economy,” Summerhayes said.
“But what I can tell you with absolute certainty is that the transition to a low-carbon economy is underway and moving quickly.”
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The involvement of Asic in the initiative is interesting following advice from Noel Hutley SC last year finding company directors who do not properly consider the material impacts of climate change on their business risk personal liability for breach of duty.
“So whether due to regulatory action or – more likely – pressure from investors and consumers, Australia’s financial sector can expect to see more emphasis on discourse around climate risk exposure and management,” Summerhayes said.
Meanwhile the bond-rating company, Moody's, is putting American coastal municipalities on notice to prepare for climate change impacts or see their credit status suffer.
"What we want people to realize is: If you’re exposed, we know that. We’re going to ask questions about what you’re doing to mitigate that exposure," Lenny Jones, a managing director at Moody’s, said in a phone interview. "That’s taken into your credit ratings."
In its report, Moody’s lists six indicators it uses "to assess the exposure and overall susceptibility of U.S. states to the physical effects of climate change." They include the share of economic activity that comes from coastal areas, hurricane and extreme-weather damage as a share of the economy, and the share of homes in a flood plain.
Based on those overall risks, Texas, Florida, Georgia and Mississippi are among the states most at risk from climate change. Moody’s didn’t identify which cities or municipalities were most exposed.
2 comments:
We are going to see more of that. As usual, Canada will be slow to adapt but it will come.
I remember reading perhaps half a dozen years ago that the US Armed Forces were taking climate change into account in their machinations on how to rule the world, because, the matter of domination being so important and all, they wanted to be on top of everything and anything that might upset their current plans in times of trouble, and adjust their approach accordingly.
Now we've got insurance and bond rating agencies in on the hunt, because it's crucial to them how they assess risk and charge accordingly. The fact that Oz, home of the "lets lock up refugees in camps on foreign soil just offshore so they don't desecrate sacred Australian soil" outlook, and the place that used to only accept whites as legal immigrants, now has a financial regulator accepting climate change and requiring action. Germany, hardly a left wing country, had parties agreeing about going green decades ago - the global warming reality wasn't/isn't regarded as a left/right thing, just something that had/has to be faced, and the science itself wasn't questioned.
Leave it to the USA to politicize the subject. If anyplace can f*ck things up it's them. Naturally, intellectual giants of the American right know for a fact from reading their bibles and questioning their innermost selves that this global warming/climate change thing is an utter scam. Because remember, folks, God will provide - to think otherwise means you're a socialist or worse, a commie. And based on this deeply-reasoned amateur philosophy, denial among the dopier sections of society there is rampant, including Trump and the entire GOP. Go USA go.
BM
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