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Climate risk self-assessment survey

This image shows APRA's contact details: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY - 1 Martin Place (Level 12), Sydney, NSW 2000 - GPO Box 9836, Sydney, NSW 2001. Telephone: 02 9210 3000, Website: Australian coat of arms - APRA

To: All APRA-regulated entities

APRA will shortly commence a voluntary survey of its regulated entities, asking them to self-assess the maturity of their current practices against APRA’s guidance on managing the financial risks of climate change. This survey is a follow-on to APRA’s 2022 climate risk self-assessment survey.

This letter is to inform all APRA-regulated entities about the purpose and timing of the survey. Regulated entities will separately receive further details from APRA.

Climate risk self-assessment survey

The survey is intended to improve both APRA’s and industry’s understanding of the approaches being taken by APRA-regulated entities to identify, assess and manage climate-related financial risks. In particular, the survey will gather insights on how APRA-regulated entities are currently managing these risks, using APRA’s Prudential Practice Guide CPG 229 Climate Change Financial Risks, published on 26 November 2021, as its benchmark.

In addition to providing insights into the management of financial risks arising from climate change, the survey will support incorporating climate-related risks into APRA’s supervisory assessments. It will also improve comparability, benchmarking and practices within and across industry. 
APRA first ran its climate risk self-assessment survey in 2022 and invited Tier 1 and Tier 2 APRA-regulated entities to participate. For the 2024 survey, APRA will make the survey available to all Banking, Insurance, and Superannuation entities that it supervises. The data provided by the survey will provide APRA with the opportunity to gain insights from the wide range of entities that are using the CPG 229 guidance.

Design of the self-assessment survey

The survey assesses the alignment between current entity approaches to considering and managing the financial risks of climate change and the expectations set out in APRA’s CPG 229 guidance.

The survey is predominantly in a multiple-choice question format, with the opportunity for respondents to provide additional contextual information for specific questions. Simplifying the question and response format in this way is expected to lower the effort required to respond to the questionnaire.

Many questions in the 2024 survey remain unchanged from the 2022 survey: this allows a standardised assessment of the approach to addressing climate change financial risks by APRA-regulated entities and how it is evolving over time. In addition, there are a small number of new questions included in the 2024 survey which gather additional insight on existing topics, respond to changes in the policy landscape, and seek insights on emerging issues including nature risk and transition plans.

Next steps

The survey is open to all Banking, Insurance, and Superannuation entities regulated by APRA. Entities will be invited to complete the survey via an online questionnaire. Entities choosing to participate in the survey will have six weeks from receiving the questionnaire to provide their responses.

Once the survey has closed, APRA will provide participating entities with de-identified peer-comparison results to enable them to better understand how their approaches and practices compare to others across their industry, as well as publish information on industry-level insights and themes from the results. APRA will also incorporate insights from the survey into its ongoing supervisory approaches to addressing the financial risks of climate change. APRA will consider the benefit of repeating the survey in future years as a means of monitoring how industry approaches to managing the financial risks of climate change evolve over time.

Should you have any questions about the climate risk self-assessment survey, please contact your responsible supervisor.

We look forward to your support for this initiative.

Your sincerely,

John Lonsdale