In a tense exchange at the Senate Economics Legislation Committee hearing, Senator Matt Canavan questioned if the prudential regulator’s climate vulnerability assessments were ‘a complete waste of money’.
The Australian Prudential Regulation Authority (APRA) was meeting before the committee to discuss its role in protecting the financial wellbeing of Australia’s community and maintaining resilience in the financial sector.
A topic raised were the findings of the body’s climate vulnerability assessment of the five largest banks which was published in November 2022. This was intended to provide insight “into the potential financial exposure of institutions, the financial system and economy to the physical and transition risks of climate change”.
It was carried out by ANZ, Commonwealth Bank, NAB, Westpac, and Macquarie Bank.
Noting APRA’s evasiveness to explain the modelling behind in its climate assessments, Canavan said: “I’m really starting to question the merit of this modelling if you cannot explain it in simple terms.
“In my experience, I’ve done modelling, if the modeller can’t explain it in plain English, it’s probably a black box and full of rubbish.”
In response, APRA deputy chair, Helen Rowell, said: “I think it’s important to understand the purpose of the work we’re doing in the climate space, and particularly the climate vulnerability assessment, and that is to ensure that the entities we regulate are able to understand the risks to which they’re exposed and the implications of that for financial system, safety and soundness and outcomes for consumers”.
The banks were asked to look at two particular scenarios and possible policy responses, she explained, that were modelled on a delayed policy response and a current settings policy response “to get the spectrum of outcomes”.
APRA chair, John Lonsdale, added that the assessment identified quantifiable impacts of climate risk on balance sheets and expected entities to build that risk in.
“I’m a little confused. Is this modelling exercise looking at the risks of climate change impacts, like weather events and natural disasters?” Canavan probed.
“Or is it looking at climate change policies […] like the impact of the transition to net zero? Which of those are you actually modelling?”
He continued to question if a net zero policy showed a negative impact on balance sheets, and the specific variables that the modelling took into account.
“What was modelled and what did you find about the impacts of net zero policies? Because it sounds like you don’t know the answer to that question,” he said.
In reply, Rowell stated the need to take the questions on notice.
“It’s a complete waste of money, absolute waste of money with red tape and bureaucracy,” Canavan declared.
“You can’t explain to the Senate why you’re doing this work.”
In the ensuing chaos, Minister for Finance Katy Gallagher called out her colleague’s “disrespectful” behaviour, and the committee chair, Senator Jess Walsh, called order to the floor.
APRA representatives were expected to revisit the climate assessments upon taking the Senators’ questions on notice.
Matt Canavan is correct – APRA is simply being sucked into the whole scam of CC, and associated woke ideology.
DDO is the who can invest. Climate Change (now called emergency) will be the what you can invest in. Once the regulators have those two, you essentially have a what looks very much like a centrally controlled economy.
A complete waste of money…much like Matt Canavan. No wonder they don’t get along, they’re too similar!