Summary
This stocktake paper outlines the recent activities and planned further work of the Council of Financial Regulators Working Group on Financial Implications of Climate Change in relation to climate change risks. The CFR agencies in Australia are taking steps to help corporates and financial institutions manage the financial risks associated with climate change and provide comparable disclosures on these risks. The Climate Vulnerability Assessment (CVA) conducted by APRA on behalf of other CFR agencies in 2020/21 measures potential financial risks posed by both physical and transition climate risks using scenario analysis, and aims to improve banks' climate risk management capabilities. The CFR agencies are also building their understanding and knowledge about how to measure and manage climate-related risks through supervisory and regulatory engagement, collaboration with expert bodies, and participation in international forums where climate change issues are gaining increasing prominence.