CSIRO, Australia's national science agency, and Commonwealth Bank of Australia today launched a joint public-private sector initiative to investigate potential impacts of climate change to the finance sector.
The partnership will develop a roadmap to help financial services companies manage and reduce the associated risks.
The project will bring together CSIRO's deep climate science knowledge and CBA's understanding of climate risks facing the finance industry to identify the critical factors that could shape future environmental and social policies on climate change.
CBA will provide funding for the research as well as anonymised data and information from across a broad range of industries that are being impacted or are likely to be increasingly affected by climate change, such as manufacturing, infrastructure, and agriculture.
CSIRO will utilise the data to develop sectoral analysis and different scenarios. CBA will then overlay economic and financial insights to underscore the varying impacts on the Australian economy.
The insights from the project will be publicly available.
CSIRO Chief Executive Dr Larry Marshall said adapting to a changing climate is a competitive advantage for Australia and will build a stronger economy, more jobs, and more resilient communities.
"CSIRO's unique climate intelligence, supercharged by Australia's largest data and AI network, and quantitative analytic capabilities can help financial institutions like Commonwealth Bank navigate an uncertain future," Dr Marshall said.
"Australian businesses can lead our national response, especially when they have access to Australia's world-class science and insights to guide meaningful, impactful investment in growth opportunities balanced by risk mitigation.
"It sounds impossible, the idea of science predicting the future, but solving the seemingly impossible is what science is for, and giving business the power to get ahead of climate will enable them to build a more resilient and sustainable nation that is globally competitive and prosperous."
Matt Comyn, Commonwealth Bank CEO, said the partnership with CSIRO would significantly strengthen the efforts being made by financial institutions and their customers and communities to adapt to climate change.
"We believe our collaboration with CSIRO will better inform our approach on how to play a leadership role in supporting Australia's transition to a more sustainable economy.
"The best scientific insight, combined with our data and insights, means CSIRO and CBA are well placed working together to help businesses understand what risks they face, how they can adapt and what opportunities are available to create jobs and investment in a lower carbon economy."
The project will also capitalise on the significant work already undertaken by CBA to identify the impact of changing climate on the major sectors of the economy and how these risks might be mitigated.
CSIRO researchers will be focused on filling identified information gaps for the finance sector, such as determining the economic impact of climate change over geographic regions. The independent science-based transition scenarios developed in this project will be used to estimate exposure to climate risks in sectors across the economy.
CSIRO scientist Dr David Newth said insights from the research will be valuable across the finance sector as aspects, such as data for internally consistent climate change scenarios, are likely to be made accessible in the future.
"Through using models to develop tailored scenarios of how the climate and economy may unfold in Australia and across the world, we can assist businesses like the Commonwealth Bank to understand risks in its portfolio and support its customers and investors to prepare for a changing climate.
"CSIRO will use a coupled economy-wide modelling approach with a focus on agricultural productivity, land use change and other biophysical considerations to understand socio-economic and physical risks posed by climate change on the Australian economy."
Products developed through this project will become available on a digital platform being developed by the Climate Resilient Enterprise initiative, established through CSIRO's Mission Program.
