Sydney (Reuters)-The Australian banking regulator issued final guidance on Friday to guide banks, insurance companies and pension funds to manage financial risks related to climate change, but did not introduce new requirements.
The Australian Prudential (NYSE:) Regulatory Authority (APRA) stated that the principle-based guidance is consistent with the Financial Stability Board’s Climate-Related Financial Information Disclosure Task Force (TCFD) recommendations, but does not impose new regulatory requirements.
“Most APRA-regulated entities recognize the potential challenges of climate change, such as…new laws or asset value adjustments, but they don’t always have a good understanding of how to respond,” APRA Chairman Wayne Byres said.
The guidance document “is a direct response to their request for clearer regulatory expectations and better examples of industry practices.”
Regulators will investigate the financial risks of climate change to understand the level of consistency between the agency’s management of climate change financial risks and the new guidelines and TCFD recommendations.
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