State govt assets worth $120b facing climate risks

NSW state government agencies aren’t being supported to manage climate risks like floods, bushfires and extreme weather that could affect billions of dollars worth of assets and disrupt crucial services, an audit has found.

NSW Auditor General Margaret Crawford.

It comes as Treasury estimates indicate the annual costs associated with natural disasters will triple per year over the next 40 years.

Auditor general Margaret Crawford looked at support being given to nine government agencies by the Department of Planning, Industry and Environment (DPIE) and NSW Treasury, however she said poor climate risk capability was found across state agencies.

The absence of a state-wide climate change adaptation action plan has prevented the implementation of a “co-ordinated, well communicated program of support” to agencies, her report concludes.

Ms Crawford says this failure has implications for transport, communications, energy security, hospitals, social housing and education and could have “significant costs” for government, which has physical assets worth $365 billion.

“DPIE and NSW Treasury’s support to agencies to manage climate risks to their assets and services has been insufficient,” she says.

“More work is needed to embed, sustain and lead effective climate risk management across the NSW public sector, especially for the state’s critical infrastructure and essential services that may be exposed to climate change impacts.”

Insufficient guidance for councils

The report says the DPIE is failing to leverage its land use planning role to ensure agencies and communities are resilient to climate change.

It says planning documents including District Plans of Greater Sydney don’t provide climate change guidance for councils and the department’s Guide for Council’s Local Strategic Planning Statements (LSPS) leave climate change out.

Meanwhile, DPIE guidance on preparing Local Enviroment Plans for councils don’t mention climate change apart from a brief mention of flooding.

“This means that councils’ Development Control Plans are at risk of not considering climate change,” the report says.

Key findings:

  • Nine of the 13 agencies examined haven’t conducted climate risks or prepared adaptation plans to protect their assets, valued at $120 billion
  • DPIE is four years late on  delivering a promised statewide climate change adaptation action plan commited to in the 2016 Climate Change Policy Framework
  • The state government’s draft Climate Change Fund Strategic Plan is yet to be finalised


Ms Crawford says DPIE and Treasury should develop a roadmap to improve agencies’ climate risk management by the end of this year and review land planning and development guidance by December 2022.

It should deliver a state-wide climate change adaptation action plan by June 2023.

DPIE has supported all applicable recommendations and says a proposed roadmap is being developed.

“DPIE will continue to work with Treasury to provide accies to information about climate change impacts and leading practice guidance to agencies,” it says in its response to the audit.

“This will them to assess potential climate risks and analyse the potential financial impacts of those risks on their balance sheets over time.”

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