Guy Debelle, deputy governor of the Reserve Bank of Australia has said that the climate is now considered a “first-order risk” to the Australian finance sector at CFA Australia Investment Conference on Oct 14. “Most Australian financial institutions now recognise climate as a risk,” he told the conference. He also added that in recent years in Australia, climate risks have increasingly been a topic of discussion with foreign investors. Climate risks can be divided into physical risks and transition risks. Physical risks are the direct loss from a climate event, such as the increasing incidences of bushfires or floods and changing physical risks have a significant impact on mortgage portfolios. There is also transition risk, which is the result of structural change to the economy due to the move to lower emissions. Changes in the economy due to changes in consumer demand or changed energy policies may also result in …