Outcomes of APRA’s Climate Risk Survey
A recent survey by APRA noted that significant variations in climate risk maturity exist, especially among smaller entities
The results of a recent survey by the Australian Prudential Regulation Authority (APRA) regarding the financial sector’s response to climate-related risks largely met expectations. However, it noted that significant variations in climate risk maturity still exist, especially among smaller entities.
The voluntary self-assessment survey, built on an earlier 2022 version, evaluates how well banks, insurers, and superannuation trustees integrate climate change considerations into their risk management and financial strategies. It has a broader scope to include all APRA-regulated entities and is aligned with the Prudential Practice Guide CPG 229 on Climate Change Financial Risks.
Some of the key findings included:
Most large entities reported improvements in their climate risk maturity since 2022
About one-quarter have seen a decline, mainly due to a decrease in self-assessed disclosure maturity.
The maturity levels in the insurance and superannuation sectors remain broadly unchanged.
Within the insurance industry, notable differences in climate risk maturity were observed among the general, life, and private health insurance cohorts.
Key strengths across most industries included governance, strategy, and risk management.
A slight decline in climate risk disclosure was noted in 2024, despite it being the most advanced area in 2022 (this trend may indicate a recalibration of expectations around what constitutes mature disclosure practices rather than an actual deterioration in those practices).
Greater scrutiny in 2025
APRA highlighted in its 2024-25 Corporate Plan that it will increase expectations for regulated entities to incorporate climate considerations into their decision-making processes.