In March 2026, Australia's insurance regulator, APRA, stress-tested the five insurers that write about 80% of the country's home insurance. Around one in seven Australian houses has no insurance today. Under APRA's severe but plausible scenarios, that could rise to around one in four by 2050 if nothing else changes. APRA is careful to call this a stress test, not a forecast, and it only looks at homes. The Climate Council's estimate, from April 2025, is that one in 23 Australian properties is at high climate risk right now.
Any company with buildings, warehouses or plants should know how many of its own sit in the places those studies worry about, and what they're worth.
If you report in Australia, you already have to answer it. The new climate reporting standard asks for the "amount and percentage of assets or business activities vulnerable to climate-related physical risks". The largest companies have lodged their first reports. For the next group down, the first reporting year starts with financial years beginning on or after 1 July 2026.
Our worry is that most companies will waste this number. They'll work it out once a year for the climate report, while the decisions it should shape (which sites to buy, build and lease) get made somewhere else, with different data.
What the standard asks for, and what it leaves to you
It asks for an amount and a percentage. It doesn't say what "vulnerable" means, or what counts as a "business activity". The people behind the global standard it's based on discussed that gap in March 2024. Their answer: the disclosure is subject to materiality, and you can use reasonable information you can get without undue cost or effort. Their guidance gives examples like the share of your property in areas exposed to flooding, heat stress or water stress.
That leaves you some choices, and you'll have to say what you chose. The amount could be what the site is on the books for, what it would cost to replace, or the revenue it supports. A count of sites isn't an amount. "Vulnerable" could mean exposed to a hazard at all, or exposed beyond a level of damage or disruption you set.
You don't have to use scenarios for this number; current exposure is fine. But your wider scenario analysis does have to use at least two, one at 1.5°C and one that ASIC's guidance says should be above 2.5°C. Using the same two here keeps your numbers consistent.
Agree the measure, the threshold and the scenarios with finance and risk before your first reporting year ends. They decide what you report, and whether anyone else in the business can use the number.
What the national studies tell you
They're useful for a sense of scale. Each one measures something different, though, and none of them measures your sites.
APRA's figure is about the insurance gap: how many houses have no home insurance, now and under stress scenarios out to 2050. It doesn't measure physical exposure at all.
The Climate Council's April 2025 report, At our front door, puts 652,424 properties (4.4%) at high risk now, about 5% by 2050 and 8.8% by 2100. It picks out the New South Wales coast, from the Northern Rivers to the Central Coast, as the hardest hit.
The government's National Climate Risk Assessment, from the Australian Climate Service in 2025, finds 8.2% of homes in high-risk areas and 8.7% in very high-risk areas today, 16.9% in all. Those labels rank places against the national average rather than against a fixed level of damage. It rates today's risk to buildings and infrastructure as low to moderate, rising to high to very high by 2050. And it notes that when insurers respond by raising prices or, in extreme cases, pulling out, they "transfer costs and risks back to householders and businesses".
None of that tells you about your own sites. Commercial buildings are built differently from houses and insured on different terms, they're often chosen with the flood maps already in hand, and there's far less published research on them. Use the national figures to decide whether physical risk is worth measuring properly. Then measure your own sites.
Doesn't the property team already check this?
Mostly, yes. Property teams look at flood and bushfire maps and get insurance quotes before they commit to a site. What they usually don't do is use the same method as the climate report.
Using the same method pays off. The number in the report and the number in the approval paper are the same number. It looks further ahead than a flood map or this year's premium can, out to 2050 under a hotter scenario your analysis already has to consider. And it catches a mismatch that site checks miss. If you tell the market a big share of your assets are vulnerable, then approve new sites in the same places without saying why, your own board is going to ask about it.
Short commitments are a fair exception. A five-year lease doesn't need a projection to 2090, and a shorter term or a break clause is a perfectly good way to manage the risk. Checking proposed sites also takes time. Nobody needs to slow approvals down. The people signing them off should just be looking at the same risk the climate report describes.
From the Socialsuite platform
Few companies check proposed sites the same way they check existing ones, but one of our customers does. An Australian food producer wanted to know the climate risk of sites it hadn't built or bought yet, not just the ones it already ran. It added its proposed sites next to its existing operations and ran a Climate Risk Assessment across all of them. That way the hazards, and how they change out to 2050, were part of the site decision itself, before any money was committed.
One number for both jobs
The same assessment can do both jobs. For the report, the amount is the total value of your existing sites above your threshold, under the hotter scenario, at the horizon you chose. The percentage is that amount divided by the value of everything you assessed. Say what measure, threshold, scenarios and horizon you used.
For decisions, check every proposed site the same way before it's approved. The approval paper should say whether the site would come in above the threshold and, if it would, why you're going ahead, on what terms and with what adaptation.
In practice:
- Include every site that matters: owned, leased and proposed, plus the things you depend on but don't own, like the port or rail line your products move through.
- Use the two scenarios your analysis already requires, at more than one point in time, so you see the trend as well as the level.
- Make physical risk a required line in property and capital approvals above a set value.
- Look at it again every year, because hazards, insurance terms and your own footprint all change.
ASIC will ask how you got there
ASIC has already looked at the first 40 reports from the largest companies. Its review found room for improvement wherever reports look forward or rest on judgment, including parts of strategy and metrics. Its next review covers years ending 30 June 2026. This number is a judgment call from start to finish, so expect to be asked how you defined it. It's a much easier question to answer when the same number is already guiding where you buy, build and lease.
