APRA surveyed financial institutions to check how they are thinking about climate change... and discovered a third of the companies it regulates don't.
👉 Background: APRA, the Australian Prudential Regulation Authority, is the government organisation responsible for making sure everything is squeaky clean across banking, insurance and super.
👉 What happened: APRA surveyed more than 60 financial institutions recently to see how they are thinking about climate change.
👉 What else: The results are in and APRA says a third of the companies it regulates have not included climate change risk into strategic planning...Eeeeep.
💡Move over credit risk, move over liquidity risk, move over market risk: financial institutions have a new major risk to focus on: climate risk.
💡 Almost 40% of institutions told APRA that climate-related events could have a direct impact on their business (think: costs related to floods or fires) and will definitely change the way consumers behave.
💡While most financial institutions recognise the risk, only a few of them have set proper metrics and targets to address it.
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