Direct Answer
APRA, MAS, HKMA, FINMA, OSFI, and South Africa’s Prudential Authority show that physical climate risk is now a global supervisory concern. These authorities differ in legal form, detail, timing, and proportionality, but the common message is consistent: financial institutions need to identify, assess, manage, monitor, and disclose climate-related financial risks, including physical risks from acute hazards and chronic climate shifts. For ClimaTwin, this creates a strong global use case for asset-level physical-risk analytics, portfolio concentration analysis, scenario testing, operational resilience review, and governance-ready evidence.
How It Works
The six supervisory evidence outputs are:
- Governance evidence showing accountability and board oversight.
- Strategy evidence showing how physical risk affects business model and resilience.
- Risk-appetite and risk-management evidence showing how exposure is measured and controlled.
- Scenario-analysis evidence across time horizons and plausible climate conditions.
- Internal-control and documentation evidence for data, models, assumptions, and limitations.
- Disclosure and monitoring evidence that can be updated as guidance and hazards evolve.
ClimaTwin’s Climate Business Intelligence™ supports these outputs for banks, insurers, asset managers, mortgage portfolios, and infrastructure investors.
Limitations
These supervisory frameworks are not identical and must not be reduced to a single checklist. Institutions must check the current status of each jurisdiction’s rules, implementation timelines, proportionality principles, and sector scope. Physical-risk evidence needs to be mapped to the institution’s own risk taxonomy and control environment.
Frequently Asked Questions (FAQs)
- Which six supervisors are covered? APRA, MAS, HKMA, FINMA, OSFI, and South Africa’s Prudential Authority.
- What is the common supervisory theme? Financial institutions need to identify, assess, manage, monitor, and disclose climate-related financial risks, including physical risks.
- What are the six evidence outputs? Governance, strategy, risk management, scenario analysis, internal controls, and disclosure or monitoring evidence.
- Why does physical risk need asset-level data? Physical hazards affect specific properties, infrastructure systems, borrowers, insured assets, and operating sites differently.
- How does ClimaTwin support global supervisory alignment? ClimaTwin maps physical hazards to portfolio exposure, vulnerability, concentration, scenarios, financial impact, and evidence documentation.
Sources
- Australian Prudential Regulation Authority. (2021). Prudential Practice Guide CPG 229: Climate Change Financial Risks.
- Hong Kong Monetary Authority. (2021). GS-1 Climate Risk Management.
- Monetary Authority of Singapore. (n.d.). Guidelines on Environmental Risk Management for Banks.
- Office of the Superintendent of Financial Institutions Canada. (2026). Climate Risk Management.
- South African Reserve Bank Prudential Authority. (n.d.). Climate Related Risk.
- Swiss Financial Market Supervisory Authority. (2024). Circular 2026/1: Nature-related financial risks.
Ready to get started? To learn how ClimaTwin can help you assess the physical and financial impacts of future weather and climate extremes on your infrastructure assets, capital programs, and investment portfolios, please visit www.climatwin.com today.
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