Are you a South African insurer thinking about climate change? These are the documents you should read.

We’ve compiled a quick guide of the documents below:

This one-page document summarises the Prudential Authority’s s regulatory and supervisory response to climate-related risks to date and outlines the strategy for the next two years.

Guidance Notice 1 sets out guidelines aimed at assisting insurers in complying with the requirements of GOI 3 (Risk Management and Internal Controls for Insurers) and GOI 3.1 (Own Risk Solvency Assessment (ORSA) for Insurers) as these prudential standards apply to climate-related risk for insurers. It aims to illustrate approaches that should be considered in managing an insurer’s climate-related risks.

Guidance Notice 2 provides guidance to insurers regarding climate-related disclosures, taking into consideration the International Sustainability Standards Board climate-related disclosures standard, under the four thematic areas of governance, strategy, risk management, and metrics and targets.

The process for developing the aforementioned guidance notices was notable because it was informed by feedback from the financial services sector.

This document details the process undertaken to finalise the Guidance Notices for banks and insurers’ climate-related disclosures, governance, and risk practices. It provides feedback on the consultation process and comments received. This feedback note is for informational purposes and may be useful for banks and insurers in their approach to climate-related disclosures, governance, and risk management.

4. The Prudential Authority’s Climate Risk Practices Observation Report

Climate-related risks were discussed with 22 selected financial institutions regulated by the Prudential Authority (PA) in the 2023 calendar year as a ‘flavour-of-the-year’ topic. This observations report provides high-level feedback on the discussions held with these institutions.

5. The South African Reserve Bank’s Financial Stability Review

The SARB has included cyber risk in its risk and vulnerability matrix of its Financial Stability Review as perpetual long-term risk that poses continuous risks to financial stability.  In this document the main concerns around climate risk and its threat to financial stability are outlined.