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:
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Most large entities reported improvements in their climate risk maturity since 2022
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About one-quarter have seen a decline, mainly due to a decrease in self-assessed disclosure maturity.
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The maturity levels in the insurance and superannuation sectors remain broadly unchanged.
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Within the insurance industry, notable differences in climate risk maturity were observed among the general, life, and private health insurance cohorts.
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Key strengths across most industries included governance, strategy, and risk management.
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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.
