Actuaries Institute backs expansion of Australian taxonomy to include adaptation and resilience
The Actuaries Institute has released its Mobilising Investment For Climate Adaptation report, landing at a moment when the conversation is clearly shifting from why we need resilience to how we fund it. In its analysis, the Institute lays out a detailed and timely assessment of the scale of investment required to prepare Australia for growing physical climate risks.
The report highlights that without a step change in how adaptation is valued and financed, the economic burden will continue to fall disproportionately on households, governments and insurers, rather than being shared across the broader financial system.
“With natural disasters already costing the economy $38 billion a year and forecast to rise to at least $73 billion by 2060, investing now in adaptation measures such as more resilient infrastructure is crucial given the predicted rise in heatwaves, floods, bushfires and storms,” the media release reads.
Expanding the taxonomy a key next step
A key recommendation from the Actuaries Institute is the expansion of the Australian Sustainable Finance Taxonomy to include adaptation and resilience, one strongly aligned with ASFI’s own market findings. In ASFI’s recent Unlocking Private Capital for the Transition report, eighty per cent of participating institutions identified credible adaptation and resilience criteria as essential to unlocking private capital and supporting long-term risk reduction across the economy.
The Insurance Council of Australia also backs the taxonomy expansion, and in its submission to ASFI stressed that clear, credible standards can help channel investment toward protecting households, infrastructure and communities from growing climate risks.
The Actuaries Institute’s analysis reinforces an emerging consensus across policy, finance and research. The Australian Government’s National Adaptation Plan has set out a national risk picture, and commits to exploring “possible next steps for the Australian Sustainable Finance Taxonomy, including expansion to adaptation and resilience.
When viewed together, these developments signal a clear direction of travel: Australia needs coherent, credible and investable frameworks to guide resilience-related capital flows.
Adaptation is not simply a technical exercise.
Expanding the taxonomy is a logical and necessary step to strengthen Australia’s climate preparedness and ensure capital is aligned with national resilience objectives.
Adaptation benefits are often realised quietly through avoided losses, strengthened infrastructure performance and faster community recovery. However, without clear and widely adopted reference points, investors face uncertainty that limits capital mobilisation.
The Actuaries Institute’s work underscores that this is not simply a technical exercise, it’s an economic imperative.
ASFI CEO Kristy Graham agrees.
“Clear, credible standards are essential if we want to unlock the scale of private investment needed to strengthen Australia’s resilience.
“The Actuaries Institute’s analysis reinforces what we have been hearing through ASFI’s taxonomy pilot, which is investors need certainty to make decisions with confidence.
“Adaptation is already delivering economic value through avoided losses and stronger community outcomes, but without the right frameworks in place, investment will continue to lag.
“Expanding the taxonomy is a practical and necessary step to help direct capital toward activities that reduce long-term climate and disaster costs.”
This credible, well-researched report from the Actuaries Institute adds real weight to something we have been hearing across the finance sector all year — Australia needs clearer frameworks to guide investment into resilience, and expanding the Australian taxonomy into adaptation is one of the simplest and most effective steps we can take.