POWERED BY MOMENTUM MEDIA
Fin services needs to walk the walk on climate risk
Banks, insurers and superannuation trustees need to do more than talk the talk where climate change is concerned, with the Australian Prudential Regulation Authority (APRA) urging them to also walk the walk and act to mitigate risks to their customers.
While APRA found that many entities were increasing their understanding of the threat of climate change, it said more needed to be done to improve how organisations disclose and manage these risks in coming years.
“APRA’s views on the economic risks of climate change, recently echoed by the Reserve Bank of Australia, are consistent with those of financial regulators internationally,” APRA executive board member and chair of the United Nations Environment’s Sustainable Insurance Forum, Geoff Summerhayes, said.
“These risks are material, foreseeable and actionable now. Uncertainty over long-term impacts or policy direction is not an excuse for doing nothing.”
A survey by the regulator of 38 large banks, insurers and super trustees found that a third believed that climate change was a material risk of their business now, with a further half thinking that it would be in the future.
Respondents nominated reputational damage, flooding, regulatory changes and cyclones as the top climate-related financial risks, with most banks already considering such risks as part of their risk management frameworks.
The outlook wasn’t all bleak however, with respondents also identifying strategic opportunities in transitioning to a low carbon economy, such as developing innovative products and services and meeting the growing demand for green investment options.
Recommended for you
Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Coalition, which has pledged to reverse any changes if it wins next year’s election.
In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges.
Chant West analysis suggests super could be well placed to deliver a double-digit result by the end of the calendar year.
Specific valuation decisions made by the $88 billion fund at the beginning of the pandemic were “not adequate for the deteriorating market conditions”, according to the prudential regulator.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.56 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
31.06 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.81 3 y p.a(%)
