Even with the best political will in the world, governments alone may not be able to prevent dangerous climate change. They will need to leverage the private sector, in particular, the financial sector, to achieve the transition to a low-carbon economy. The cumulative impact of decisions by financial actors is crucial for the success of otherwise clean energy alternatives. Despite this, only recently has the financial sector been thought of as part of the solution, rather than part of the problem. Nongovernmental organizations (NGOs) have led the way in seeking to change social norms about the undesirability of fossil fuel investment. Recently, however, prudential regulators have identified climate risks confronting the financial sector and recognized that these risks pose an imminent threat to financial order and stability. As such, prudential regulators in developed countries have begun to introduce policy responses. In the case of the Australian Prudential Regulation Authority (APRA), this has included public statements, "jawboning," stress tests, and carbon disclosure. This Article examines these nascent prudential regulatory responses, namely their limitations and impacts, and the role of other non-state actors, and considers potential future regulatory action.
|Number of pages
|Jurimetrics: journal of law, science and technology
|Published - 2019