Australia’s banking regulator finalises climate change policy guidance By Reuters

by Msnbctv news staff



By Paulina Duran

SYDNEY (Reuters) -Australia’s banking regulator launched on Friday its remaining steering for banks, insurers and pension funds to handle monetary dangers related to local weather change, stopping wanting imposing new guidelines.

The Australian Prudential (NYSE:) Regulation Authority (APRA) stated the principle-based information is aligned with suggestions from the Monetary Stability Board’s Disclosures Activity Drive on Local weather-related Monetary (TCFD) arrange by the G20 wealthy international locations to coordinate guidelines.

“Most APRA-regulated entities recognise the potential challenges of local weather change, resembling … new legal guidelines or changes in asset values, however they do not at all times have understanding of reply,” APRA Chair Wayne Byres stated.

The steering paper adopted a draft model revealed in April for session and “is a direct response to their request for extra readability about regulatory expectations and examples of higher trade observe,” Byres stated.

The steering https://www.apra.gov.au/consultation-on-draft-prudential-practice-guide-on-climate-change-financial-risks requires monetary firms to right away begin managing local weather change dangers inside their current threat administration frameworks.

It requires administrators to set “publicity limits and thresholds for the monetary dangers that the establishment is keen to bear” when local weather dangers are thought-about materials.

Administration should additionally set clear traces of obligations within the managing climate-related dangers, and firm boards should maintain senior administration to account for such obligations.

But it surely doesn’t asks for an express alignment between local weather threat administration and government remuneration.

“Some worldwide regulators are more and more making a direct connection between local weather threat and remuneration. APRA … retains the view that boards ought to keep the discretion to design a remuneration framework that’s acceptable for his or her establishment.”

The regulator will conduct a survey on local weather change monetary threat to know the extent of alignment between establishments’ administration of local weather change monetary dangers, the brand new steering and the TCFD suggestions.

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