A landmark national assessment

In September 2025, the Australian Government released its first National Climate Risk Assessment (NCRA). The assessment identifies 56 nationally significant risks, with 11 flagged as priorities for deeper analysis – spanning water security, critical infrastructure, health, food systems, regional communities, and national security.

The NCRA marks a turning point: for the first time, Australia has a shared national framework for understanding climate risk. But this is not just about modelling possible futures. The past decade has already delivered a series of disasters that mirror the very risks the report highlights.

This blog post provides an overview of the evolving climate risk landscape and considers what all this means for organisations going forward.

Climate impacts already reshaping Australia

Black Summer bushfires (2019–20)

The 2019–20 Black Summer fires burned more than 20 million hectares, destroyed over 3,000 homes, and killed or displaced billions of animals. Entire communities were engulfed in smoke for weeks, with widespread health consequences. These fires were fuelled by record heat, severe drought, and low soil moisture, a classic example of compounding risks now central to the NCRA.

East coast floods (2022)

In early 2022, devastating floods struck South East Queensland and northern New South Wales. At least 24 lives were lost, tens of thousands of homes were inundated, and the economic costs ran into the tens of billions. Recovery was hampered by repeated rain events, overwhelmed infrastructure, and disrupted supply chains. These events broke many historical records and challenged the existing understanding of risk frequency and intensity.

Coastal impacts

From Sydney’s Northern Beaches to Victoria’s Bellarine Peninsula, coastal erosion and inundation are already displacing communities, damaging infrastructure, and forcing debates about seawalls, managed retreat, and nature-based defences. What once seemed a long-term challenge is now a pressing adaptation issue.

Heatwaves – the silent disaster

More Australians die from heatwaves than from any other natural hazard. Between 2019 and 2023, extreme heat was linked to more than 1,000 deaths, with impacts falling most heavily on the elderly, outdoor workers, and those without access to cooling. Heat waves also disrupt energy systems, buckle roads and rail lines, and drive up hospital admissions. Unlike bushfires or floods, heat is a hazard that will intensify in all locations and under all warming scenarios.

A built environment under stress

These escalating impacts point to a deeper challenge: much of Australia’s infrastructure and housing are not designed for the climate we already face, let alone what is coming.

• Homes are often lightweight and poorly insulated, relying heavily on air-conditioning rather than passive design.
• Homes are built in flood-prone areas and may be poorly elevated and/or constructed from water-prone building materials.
• Urban areas suffer from heat-trapping hard surfaces, dark roofs, and limited tree cover.
• Critical facilities such as schools, aged care centres, hospitals lack adequate passive cooling and backup systems.
• Workplaces and infrastructure are exposed to heat, flooding, and storm damage, with limited redundancy.

As the NCRA emphasises, adaptation is not just about responding to hazards, it is about redesigning the environments in which Australians live, work and learn.

The risks ahead: every half degree matters

It’s also worth highlighting the future projections from the NCRA. The report includes modelling by Australia’s leading climate scientists on risks under 1.5ºC, 2ºC, and 3ºC warming scenarios. Each increment carries escalating threats to Australians’ health, economy, infrastructure, and natural environments.

Importantly, the report notes that warming across Australia has already reached 1.5ºC, yet it still published the 1.5ºC scenario as a benchmark.

Under the 1.5ºC scenario:

• Average annual heatwave days could increase by 50%.
• More than 500,000 Australians in coastal regions at risk from rising sea levels by 2030.
• Heat-related deaths could increase by 100%+ in Sydney and Darwin.
• The economy could lose more than $19 billion by 2030.

Under the 2ºC scenario:

• Average annual heatwave days could increase by 125%.
• More than 1.5 million Australians in coastal regions at risk from rising sea levels by 2050.
• Heat-related deaths could increase by up to 190% in major cities.
• The economy could lose more than $211 billion by 2050.

Under the 3ºC scenario:

• Heatwave frequency could increase by two weeks per year.
• Sea-level rise would leave 3 million Australians exposed to flood risk by 2090.
• Heat-related deaths could increase by up to 400% in major cities.
• The economy could lose more than $4.2 trillion by 2100.

These numbers underline a critical point: every fraction of a degree matters. Adaptation is urgent, but so too is mitigation to avoid the steepest risks.

Lessons for organisations

The past decade’s climate impacts, reinforced by the NCRA, point to several clear lessons:

1. Heat is systemic: it affects health, energy, transport, water, and productivity all at once.
2. Built environment adaptation is urgent: without redesign, cities and infrastructure will remain dangerously exposed.
3. Risks compound: disasters rarely occur in isolation; cascading impacts multiply costs and disruptions.
4. Equity matters: vulnerable communities face the highest risks and the fewest resources to adapt.
5. Delay is costly: disasters already cost Australia tens of billions annually; proactive adaptation is far cheaper.

Translating these lessons into action requires structured and proven methods.

Frameworks and guidance to guide action

The NCRA offers a national reference point, but organisations need structured approaches to translate it into action. Useful frameworks include:

• NCRA categories: Benchmarking organisational risks against national priorities.
• TCFD / IFRS S2 / ASRS disclosure frameworks: Embedding climate risk into governance and financial reporting.
• ISO 31000 and ISO 14091: Robust, internationally recognised methods for climate risk assessment and adaptation.
• Scenario analysis and stress testing: Exploring vulnerabilities under various warming pathways. The RCPs (Representative Concentration Pathways) describe greenhouse gas concentration trajectories, while the SSPs (Shared Socioeconomic Pathways) outline alternative global development pathways, and together they provide a framework for consistent climate change scenario analysis.
• State-based frameworks: For example, the Queensland Climate Resilient Councils (QCRC) Climate Risk Management Framework.
• Cost–benefit and ROI tools: Comparing the cost of adaptation with the far higher costs of disaster recovery.

Policy signals and organisational responses

The Australian Government’s response to the NCRA signals significant policy and regulatory implications.

For example, the government’s National Adaptation Plan includes an intention to embed climate resilience into the National Construction Code (NCC), even though broader NCC updates were paused last month to support the goal of building 1.2 million homes within five years.

While Housing Minister Clare O’Neil paused broader NCC updates until 2029, the government’s National Adaptation Plan includes an intention to embed climate resilience into the code. It remains unclear whether or when these resilience measures, such as the adoption of future climate files, heatwave considerations, and thermal comfort metrics, will be implemented.

The government’s stronger focus on climate risk assessment and adaptation is also likely to shape expectations under the Australian Sustainability Reporting Standards (ASRS) and influence broader stakeholder scrutiny. Investors, regulators, and communities will increasingly expect organisations to demonstrate how they understand and are preparing for physical climate risks, not just reporting on emissions. This means risk assessments should be transparent, forward-looking, and linked to adaptation actions, helping to build stakeholder confidence while also aligning with emerging disclosure requirements.

For organisations, the Government’s response is a clear signal that climate risk assessment and adaptation are moving higher up the policy agenda, with flow-on effects likely across regulatory frameworks and reporting requirements. This direction will inevitably influence state and local governments, as well as businesses and institutions, particularly those facing obligations under evolving sustainability reporting standards.

Organisations should take note and align early, both to manage risks and to position themselves for potential funding opportunities linked to climate risk assessments, adaptation planning, and hazard preparedness. At a foundational level, this means developing a clear understanding of how more intense or frequent rain, heat, fire, wind and humidity could interact with assets, workflows and supply chains, and building strategies to strengthen resilience.

Importantly, organisations should view climate risk assessment not only as a compliance exercise but also as a way to identify opportunities. Responding proactively can deliver multiple benefits, from reducing long-term operating costs and safeguarding assets to improving service delivery and community amenity.

Take action

If you need help developing a climate transition strategy and action plan, or a climate risk assessment, contact us today to learn how we can support your transition. Reach out to  Barbara or Patrick for more information.

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