Industry climate vulnerability assessments might be made available as a tool for shareholder activists against the agricultural or mining sectors, Nationals senators have complained.
The prudential regulator is conducting a pilot of the planned assessments in what APRA chair Wayne Byres says is an effort to allow financial bodies to make better decisions about financing businesses.
Senator Bridget McKenzie said it was not really about financial viability, but the political risk of shareholder activists.
"It's great to feel great about our assessments and how we're working with the world [on emissions reduction], but at the end of the day, it's going to be small businesses that pay," Senator McKenzie said.
The Victorian senator compared the climate assessments to those conducted by Animals Australia, which negatively assesses banks for financing farms.
NSW Senator Perin Davey questioned whether the assessments would lead to more examples like ANZ withdrawing finance from the Port of Newcastle as they are a throughput for thermal coal.
"My concern is that it is in the regions where the results of this ideological policy framework will happen," Senator Davey said.
Mr Byres said those were legitimate concerns, but the prudential regulator was not telling banks where or not to invest.
"We're trying to get away from things where there's just things labelled evil or labelled bad, actually to have fact based analysis," Mr Byres said.
"If the analysis is these particular customers or particular industries actually have a plan to adjust if they're low emission and fine, that's good. We will get better decisions made about where to allocate capital in the community."
The regulator has not decided if the assessments will be made available to shareholders or just to financial institutions, but Mr Byres said investors and shareholders are demanding more transparency around the risk of climate vulnerability.
A practice guide is also coming to help financial institutions meet the existing risk management obligations on climate.
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: