With weather-related disasters on the rise, costing lives and trillions in losses https://www.reuters.com/business/environment/weather-disasters-killed-2-million-last-50-years-un-agency-says-2021-09-01, regulators and central banks are looking to ready companies and financial systems to cope with the fallout.
The Australian Prudential Regulation Authority's (APRA) climate assessment https://www.apra.gov.au/news-and-publications/apra-publishes-new-details-on-climate-vulnerability-assessment is also looking at how banks can make changes to their business models and take steps to tackle different climate-related scenarios.
Commonwealth Bank of Australia, Westpac Banking Corp, National Australia Bank, Australia and New Zealand Banking Group and Macquarie Bank started participating in the CVA in June.
They all expect to submit their first analysis by the end of 2021, with the combined findings likely early next year.
The two scenarios in the CVA focus on a rapid reduction in emissions by 2050, and conversely on higher emissions with global policies failing to stop things getting a lot worse.
"Climate change is a global challenge and is driving major policy responses and investment decisions around the world," APRA Chair Wayne Byres said in a statement.
"These will have consequences for Australian companies, presenting both risks and opportunities."
A U.N climate panel warned https://www.reuters.com/business/environment/un-sounds-clarion-call-over-irreversible-climate-impacts-by-humans-2021-08-09 in August that global warming is dangerously close to spiralling out of control.
(Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Shounak Dasgupta)