Inquiry into Carbon Risk Disclosure welcomed Media Release

Feb 02, 2016 - 5:50pm

The Climate Institute welcomes the vote for the establishment of the Senate Economics References Committee Inquiry into Carbon Risk Disclosure in parliament this afternoon.

The Institute’s July 2015 discussion paper, Australia’s Financial System and Climate Risk, outlined several potential sources of financial risk, including both direct climate change impacts and secondary effects, such as a slump in demand for carbon-intensive exports. The paper called for a close examination of these risks by the appropriate authorities.

“Australia has one of the most emissions-intensive economies in the world,” said The Climate Institute CEO, John Connor.

“We are also more exposed to the effects of climate change than any other developed country.”

He said it is essential that all our financial and economic policymakers understand how climate change will affect their work. This Senate Inquiry can be a positive opportunity for public discussion of this task.

“Many investors are realising that the world has changed and that the drive to get to net zero carbon emissions will bring opportunities and risks,” Connor said. “However others are still unaware of how the shift to a climate-safe economy will challenge many of the old assumptions behind financial and investment policy.”

“The past few months has seen companies, investors and global authorities take unprecedented action on climate risk,” he said. “The international agreement struck in Paris in December helped galvanise action, but falling prices of fossil fuels, particularly coal, have also alerted investors to the risks of banking on a high-carbon future.”

Connor said that the announcement of the Task Force on Climate-Related Financial Disclosures was a key development for investors at Paris, as it will develop a framework for consistent, voluntary climate risk disclosures. This Task Force works at the behest of the Financial Stability Board, a global group of financial supervisors whose members include the Reserve Bank of Australia and the Australian Treasury. It will be led Michael Bloomberg, and includes BHP’s Dr Fiona Wild, among other private sector experts from around the world.

“Australia can’t simply rely on international efforts to address every aspect of our own financial climate risk,” Connor said. “The combination of our industry mix, our investment landscape and our exposure to climate change itself demands a comprehensive review of Australian climate risk. To protect every Australian, we need to understand where we are exposed to the effects of climate change.”

For more information
Brinsley Marlay ● Media Manager ● 02 8239 6299

Notes for editors:
1.      Information on the FSB’s Task Force on Climate-Related Financial Disclosures can be found at http://www.fsb-tcfd.org/
2.      The Climate Institute’s global map on climate action lists key measures taken by national governments worldwide: http://globalclimateactionmap.climateinstitute.com.au

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