Super fund CEOs support continued climate risk regulation: APRA

The news: The leaders of some of Australia's largest superannuation funds have emphasised the importance of climate risk disclosure and reporting, following roundtables with the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) late last year.

The numbers: APRA and ASIC hosted two joint roundtables in November and December, which were attended by 14 superannuation chief executives, and other CEOs representing the wider industry.

The context: APRA said the CEOs in attendance collectively emphasised:

• The importance of consistent climate risk disclosure and reporting, highlighting the need for standardised metrics, methods and scenarios to ensure comparability across the industry;
• Concerns about the complexity and cost of mandatory reporting, while also recognising the benefits of voluntary disclosure;
• The importance of clear and practical guidance from regulators and the role of industry bodies in supporting trustees;
• The challenges of integrating nature risk with climate risk and the need for reliable data and consistent metrics, and the impact of climate risk on their investment strategies and the selection of investment managers and custodians;
• The value of aligning with global standards and international coordination in climate risk reporting; and
• The importance of clear and effective communication with members regarding climate and nature risks.

APRA said that the CEOs in attendance acknowledged that nature risk is a topic of growing importance, though "not yet a primary focus", with both climate and nature risk presenting financial risks and opportunities.