Climate Measurement Standards Initiative

Reducing risks & costs

of climate-related disclosures for insurers, asset owners and banks, consistent with the TCFD

Providing scientific advice

on approaches, methods, assumptions, and data for estimating future costs that are disclosed

Developing a shared understanding

of climate science, impacts on extreme events and data requirements

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Initiative objectives

Provide consistent and comparable financial disclosure guidelines under TCFD recommendations for producers and users of such guidelines.
Develop reference scenarios that provide relevant details on the recommended climate models and climate impacts for extreme events.
Support wider disclosure of climate change scenarios by the banking, insurance and asset owner sectors in Australia.
Develop a framework for consideration by regulators, governments and other stakeholders to support the assessment of disclosures and financial stability.
Present a roadmap for future research and development aligned with disclosure requirements.

Why is this initiative needed?

The Task Force on Climate-related Financial Disclosures (TCFD), launched in 2015 by the Financial Stability Board is quite broad in its guidance on how to assess and disclose climate-related risk. This has the potential to lead to disclosures which are not comparable, consistent or aligned across reporters and to crucial Australian factors. The Climate Measurement Standards Initiative (CMSI) was formed to bridge this gap for asset owners, banks, insurers and traders of private and residential property in Australia, and for institutions whose role it is to oversee financial and community stability.

The CMSI is a first step to providing Australia a common understanding of financial disclosures regarding future damage to residential and commercial properties by climate-related phenomena.

How will the Initiative fill this gap?

As an industry-led collaboration between insurers, banks, scientists, regulators, reporting standard professionals, service providers and supporting parties, the Climate Measurement Standards Initiative (CMSI) increases/builds confidence by providing standards for disclosure.

The project integrates the disciplines of climate science, hazard science, catastrophe modelling and financial modelling to provide a set of open source standards for the disclosure of climate-related physical risks for companies with financial interests in physical assets, including residential and commercial buildings or other infrastructure in Australia.

Read the reports.

Climate scenario analysis is an emerging area of practice. Many are looking for support on how to approach climate scenario analysis within their organisation.

The Use of Climate Scenarios in Australia provides:

How To Guides for climate scenario analysis for physical and transition risk
Review of guidance documents available to support scenario analysis
Case studies of climate scenario development and analysis in several sectors – including key insights

Who we’re working with

The initiative is being coordinated by a steering group led by Climate-KIC Australia, the National Environmental Science Program, Earth Systems and Climate Change Hub and a group of industry partners, these include: QBE, Suncorp, IAG, RACQ, National Australia Bank, Westpac, Commonwealth Bank of Australia, HSBC Australia, Munich-Re, Swiss-Re, Leadenhall CP, MinterEllison and Investor Group on Climate Change.

All information developed will be published under an open source licence by Climate-KIC Australia in 2020.