Top Posts
NDDC, others push for climate change awareness in...
Heaviest monsoon in a decade kills 458 people...
Council releases first fully electric bin lorry
Report: A fifth of migratory species face extinction...
Stakeholders seek integration of climate change into national...
Study shows US asthma inhalers produce same emissions...
Report: Nigeria, others may lose $300 billion, 49m...
Pope Leo hits out at climate change critics
Nigeria insurers prepare to global delegates on climate...
Energy Dept. asks employees not to use words...
EcoNai Newsroom
  • Newsround
  • Nigeria
  • Africa
  • World
World

Regulator: Australia’s banks to reduce lending to regions at risk of climate change

by Segun Ogunlade December 1, 2022
written by Segun Ogunlade December 1, 2022
629

As the risk of losses due to the climate crisis escalates, banks expect to reduce lending to households and businesses in northern Australia and to fossil fuel industries across the country.

A new report by the Australian Prudential Regulation Authority (Apra) found climate change could make banks more vulnerable to economic downturns as they face up to a threefold increase in lending losses by 2050, but that the system should be able to absorb the impact.

According to the climate vulnerability assessment (CVA), banks’ lending losses on mortgages were expected to be higher in parts of northern Australia, which is at greater risk of extreme weather events including cyclones and heavy rain. Modelling from the banks suggested lending losses in Queensland could increase by 35% between 2030 and 2045.

Read also: NISS says soil nutrient loss affects nutrition, sustainable food security

The assessment further found that Australia’s five biggest banks – ANZ, Commonwealth Bank, Macquarie, NAB and Westpac – were likely to respond to the potential for higher lending losses by tightening loan-to-value ratio limits on new mortgages and reducing lending to regions and economic sectors most at risk unless there was additional government policy support.

In their reactions, observers said that the assessment was a good start in considering climate risk on banks but did not go far enough in assessing the impact on all parts of the economy, or the cumulative effect of extreme events and rising temperatures.

Policy director with the Investor Group on Climate Change, which represents $2tn in assets under management, Erwin Jackson said that there was a lot of variability in the results from different banks, in part because the models were new and the data incomplete.

“The government needs to increase funding for the underlying climate science, and the banks need to significantly improve their analysis that translates the science into comprehensive climate risk models,” he was quoted as saying.

Speaking further, Jackson said that the assessment showed banks were changing their lending practices.

“That means pulling back from banking vulnerable industries and regions,” he said. “Investors are also undertaking similar approaches in response to climate risks.”

Story was adapted from the Guardian.

AustraliaBanksClimate changeImpactsLendingReduction
0 comment 0 FacebookTwitterPinterestEmail
admineconai

previous post
NISS says soil nutrient loss affects nutrition, sustainable food security
next post
ADF approves $13.95 million grant for Borana Resilient Water Development

Related Posts

Heaviest monsoon in a decade kills 458 people...

October 9, 2025

Council releases first fully electric bin lorry

October 9, 2025

Study shows US asthma inhalers produce same emissions...

October 7, 2025

Pope Leo hits out at climate change critics

October 3, 2025

Protesters seek $5tr payment from fossil fuel companies

October 1, 2025

UN official says climate change displaces up to...

September 30, 2025

UN ends high-level week with calls for peace,...

September 30, 2025

China announces plans to cut greenhouse gas emissions...

September 25, 2025

China locks down as Super Typhoon Ragasa nears...

September 24, 2025

Trump says climate change ‘greatest con Job in...

September 24, 2025

Leave a Comment Cancel Reply

Save my name, email, and website in this browser for the next time I comment.

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

  • Facebook
  • Twitter
  • Instagram
  • Linkedin
  • Bloglovin
  • Vimeo

@2021 - All Right Reserved. Designed and Developed by Eco-Nai+

EcoNai Newsroom
  • Newsround
  • Nigeria
  • Africa
  • World