Australian Pensions Face Climate Risk 

Australia’s finance sector could faces disruption if the physical damages of climate change are not effectively managed, according to a national risk assessment conducted by the government. The first of its kind, the assessment looked at how rising temperatures could impact national security, infrastructure, health and the financial system, prompting a warning that climate-related economic volatility could threaten retirement savings. Australia and New Zealand’s Investor Group on Climate Change said the national risk assessment had been welcomed by investors, who have been asking for this for a decade. “Super funds and investment managers have a legal duty to act in your best financial interest and have assessed that climate change damages are amongst the largest risks to long-term retirement savings,” said Erwin Jackson, Managing Director of Policy at the Investor Group on Climate Change. “Climate volatility means economic volatility, so addressing climate change systematically is essential for protecting the retirement savings of millions of Australians. We must have a fair and fast transition to net zero emissions, but we must also adapt.” Jackson further described the assessment as a first step towards ensuring that various stakeholders – including governments and investors – have a shared understanding of physical climate risks and can work together on adaptation priorities. 

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