"Today's risk assessment shows the potential of big and growing hazards to Australian businesses from climate change – and that our national preparedness needs a significant uplift," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"The costs of extreme heat, intense fires, flooding and other impacts will be felt in many ways – including lower workforce productivity, insurance that is dramatically more expensive or simply unavailable, and disrupted supply chains. Businesses are already grappling with these costs and risks, and not just in the most disaster-exposed regions. Australian Industry Group's own research has shown insurance cost and access has become a widespread concern for industry as the financial impact of disasters raises reinsurance costs for all.
"The risk assessment makes for sobering reading, suggesting significant climate change is locked in, but ongoing Australian and global action towards net zero emissions can still prevent more upheaval. We may need to work for the best on mitigation while planning for the worst on adaptation.
"There are still big gaps to fill. While temperature impacts are quite well understood, the size and even the sign of changes to severe storm activity still has low confidence. As we've seen with recent storms buffeting Brisbane or leaving parts of Victoria blacked out for days, lives and livelihoods are being deeply impacted.
"This report should be just the start of an iterative cycle of improvement to our preparedness to adapt to change. Businesses are being asked to report their climate risks to investors every year, and the physical risk is the part of that which is least understood by most, and most likely to be financially material. Government can help by ensuring that in return for their reporting, businesses can draw on up-to-date and increasingly comprehensive public information about risks and impacts across Australia. This risk assessment and national plan should be updated at least every five years.
"With a new national emissions target in the offing, the risk data is a reminder that 'least cost climate policy' is not just about the efficiency of climate policy tools, but also their effectiveness in avoiding as much as possible in terms of the costs of climate change itself," Mr Willox said.
