A climate index has launched to measure extreme weather conditions with support for industry groups like APRA and the investor group on climate change.
The Climate Index has been launched by the Actuaries Institute to measure extreme weather conditions and changes to sea levels to help policymakers and businesses assess the frequency of weather extremes.
The Climate Index has been created with collaboration from the Bureau of Meteorology, the Commonwealth Scientific and CSIRO as well as input from insurance and natural hazard scientists.
APRA lent their support to the index after warning last year that the risks of climate change were foreseeable, material and actionable.
APRA executive board member Geoff Summerhayes said the initiative was a positive step towards identifying the risks of climate change on businesses.
“APRA has a longstanding working relationship with the Actuaries Institute, collaborating on financial risk metrics and standards. We believe this initiative is a positive step towards helping regulated entities to understand and manage the potential impact of climate risk on their businesses,” he said.
The Investor Group of Climate Change chief executive Emma Herd said the effects of climate change were here and only getting worse.
“Australian investors are looking for the tools they need to better assess and mitigate physical risks for their investments. The Australian Actuaries Climate Index is a welcome new tool for managing climate risk,” she said.
The index will primarily look at the 99th percentile of observations and measure extremes to help organisations assess risk with more risk data to follow.
Actuaries Institute president Barry Rafe said the project will help all organisations to better understand extreme weather across the country.
“This project aims to help big and small corporations better understand the changes in weather extremes across Australia.
“It is one way to bring science and business together,” he said.
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