LONDON, January 28, 2021 – The Australian government announced this week at the Climate Adaptation Summit that it will join the international Coalition for Climate Resilient Investment (CCRI) with the aim to better integrate climate risk into investment decision making.
CCRI is a public-private coalition of institutional investors, banks, insurers, rating agencies and governments, representing over US$11 trillion in assets. The finance sector-led initiative was launched at the UN Climate Action Summit in 2019, with support from the UK Government, World Economic Forum and Global Commission on Adaptation, to develop consistent frameworks to integrate and accurately price physical climate risks in investment decisions.
Worsening natural disasters across Australia, including the intensity of the Black Summer bushfires, illustrated the threat of asset damage, operational disruption and human suffering from physical climate risks and disasters that continued to escalate in 2020. In response to the rising frequency of such extreme events, the integration of physical climate resilience into mainstream infrastructure investment is the CCRI’s core goal.
Technical deliverables from CCRI will help the Australian government to mitigate the impacts of climate change, reduce the country’s exposure and channel more private capital towards building greater resilience across economies and communities.
Sussan Ley, Australian Minister for the Environment, said: “We are joining global partnerships and taking the lead in building resilient communities. Climate adaptation is about taking practical actions to help our environment, our communities and our economy deal with the impacts of climate change that are already taking place. We are focused on the steps we can take now and in the future to create a more resilient Australia.”
Carlos Sanchez, Director of Climate Resilience Finance at Willis Towers Watson and CCRI Executive Director, said: “The Australian Government’s decision to join the Coalition for Climate Resilient Investment is a welcome step toward bolstering the necessary frameworks for managing climate risk and accelerating private capital support for climate adaptation measures. We look forward to working together in order to help deploy more efficiently the flow of funds for investment in infrastructure projects, adding an important element towards enabling a transition to a more climate-resilient, low-carbon, sustainable economy.”
According to the Investor Group on Climate Change (IGCC), a supporting institution of CCRI, expert advice presented to the Australian Climate Roundtable and the Royal Commission into the National Natural Disaster Arrangements shows Australia remains deeply unprepared for the current and future physical risks created by a warming planet.
Emma Herd, IGCC Chief Executive Officer, said: “Given the scale of the challenge, governments alone won’t be able to shoulder the load and private capital will be essential to building climate change resilience across our economy. The need for cross-sector and public and private collaboration will be particularly acute as governments will be more fiscally challenged after deploying immediate economic relief in the wake of the COVID-19 pandemic. By joining the CCRI, Australia will become part of an international cohort working to address common climate resilience challenges across the financial system.”
A United Nations Climate Action Summit (UNCAS) and COP26 flagship initiative, The Coalition for Climate Resilient Investment (CCRI) represents the commitment of the global private financial industry, in partnership with key private and public institutions, to foster the more efficient integration of physical climate risks (PCRs) in investment decision-making.
CCRI aims to create a more resilient global financial industry in which key incentive structures foster an accurate pricing of physical climate risks (PCRs) in investment decision-making, resulting in more resilient economies and communities across the world.
The Coalition brings together private companies, governments and inter-governmental bodies, including many of the world’s leading financial businesses and asset managers that collectively manage more than US$11 trillion in assets.
For more information on the Coalition, visit www.resilientinvestment.org
As countries face the biggest health crisis in living memory and climate risk, the defining challenge of the modern era, world leaders must resist the trap of parking one systemic risk to address the other.
