Essential services lagging behind in the face of climate risk

Public authorities look after some of the most critical parts of the economy and society, but are failing Australian taxpayers in tackling climate risks.

A report released Wednesday by the Independent Center for Policy Development shows that public sector administrators are not as good at assessing, disclosing and managing climate risks as their private sector counterparts.

Yet the risks are growing as water and electricity authorities grapple with power shortages and blackouts, while property owners are vulnerable to damage from cyclones, fires and storms. floods.

Access to finance could become an issue as credit ratings are impacted by climate risk, and the future could also lead to climate change lawsuits.

The research found that the reporting practices of some public authorities were moving towards best practice, but many were not.

The centre’s climate chief Tom Arup said public sector directors were “falling behind” while the private sector had improved in response to rising regulatory, legislative and shareholder expectations about risk climatic.

Some states have developed tools to assess physical risks and encourage risk reporting in financial statements.

But it is uneven across Australia and needs to be normalized to understand the extent of climate risk exposure, the report says.

The Albanian government has signaled its intention to introduce mandatory climate risk disclosure rules, which will also change public sector governance.

For many public companies, understanding the risks posed by climate change – both physical and the transition to new ways of operating – is not currently part of their core business, according to the report.

Ministers and departments are encouraged to clarify that climate risk expectations are no different from financial reporting rules or procurement decisions.

Report author Arjuna Dibley said climate risks are only set to intensify, with extreme weather events expected to increase.

“Ultimately, climate risk from public authorities rests with the public – we all have a strong interest in ensuring that these risks are managed appropriately,” Dr Dibley said.

Michelle J. Kelley