APRA to assess industry's climate risk management

This year’s survey will have participants from banking, insurance, and superannuation entities.

Australian Prudential Regulation Authority (APRA) will launch a voluntary survey for its regulated entities to self-assess their current practices against APRA's guidance on managing financial risks associated with climate change. 

This follows APRA's 2022 climate risk self-assessment survey.

The purpose of the survey is to enhance understanding of how APRA-regulated entities identify, assess, and manage climate-related financial risks. 

It will use APRA's Prudential Practice Guide CPG 229 Climate Change Financial Risks, published on 26 November 2021, as its benchmark.

The survey will help incorporate climate-related risks into APRA's supervisory assessments and improve comparability and practices within the industry.

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In 2022, APRA invited Tier 1 and Tier 2 regulated entities to participate. For the 2024 survey, all Banking, Insurance, and Superannuation entities under APRA's supervision will have the opportunity to participate.

The survey assesses alignment between entity approaches and APRA's guidance, primarily using a multiple-choice question format. 

Some questions remain unchanged from 2022, while new ones address evolving topics like nature risk and transition plans.

Entities will be invited to complete the survey via an online questionnaire, with six weeks to respond. APRA will provide de-identified peer comparison results to participants and publish industry-level insights from the survey.

Insights from the survey will inform APRA's supervisory approaches, and future iterations may monitor industry changes over time.