Climate Risk Management Policy¶
| Code | CLQ-007 |
| Domain | Climate & ESG Risk |
| Owner | Chief Risk Officer |
| Status | Draft |
| Applicability | Platform |
| Jurisdiction | NZ + AU |
| Business domain | BD03 |
| Review date | 2027-04-18 |
Regulations: NZ FMC Act¶
Purpose¶
The platform shall provide continuous, automated assessment of climate-related financial risk across the lending portfolio. Physical risk (property-level hazard exposure for mortgage collateral) and transition risk (high-carbon sector concentration) shall be assessed automatically and included in the Risk Appetite Framework dashboard. Manual climate risk assessments are an exception escalation path, not the default.
Obligations¶
Physical risk¶
The platform shall maintain a live physical risk assessment for all mortgage collateral using a configured third-party property hazard data source. Each property shall be classified by physical hazard tier. The CRO shall be alerted automatically when portfolio physical risk concentration in any tier breaches the configured RAF threshold.
Transition risk¶
All business lending counterparties shall be classified by ANZSIC sector code. Sectors shall be mapped to climate transition risk tiers. High-transition-risk sector concentration shall be monitored continuously against RAF limits.
Climate stress testing¶
A physical risk scenario and a transition risk scenario shall be incorporated into the stress testing engine (MOD-034). Results shall be included in the ICAAP stress section.
TCFD disclosure¶
An annual TCFD-aligned climate disclosure shall be generated on the configured schedule. The Metrics & Targets section shall be auto-populated from live model outputs. The Governance and Strategy narrative sections shall be institution-completed templates. Each completed disclosure shall be stored as an immutable record.
Regulatory note¶
The NZ Climate-related Disclosures Act 2021 requires TCFD-aligned disclosure for in-scope NZ institutions. APRA CPG 229 sets equivalent AU supervisory expectations. This policy builds to both. Specific metric requirements will be updated when the NZ Disclosure Standard and any AU CPS 229 binding standard are finalised.
Satisfying modules¶
| Module | Name | Mode | Description |
|---|---|---|---|
| MOD-152 | Climate risk assessment | CALC |
Physical and transition risk scores computed continuously across the lending portfolio and integrated with the stress testing engine — no manual climate risk assessment required. |
Part of Climate & ESG Risk · Governance overview
Compiled 2026-05-22 from source/entities/policies/CLQ-007.yaml