Despite rich natural resources and an impressively stable economy, it’s not a case of ‘no worries’ for Australia. Battling intense climate change exposure and a cybersecurity crisis, the nation’s risk managers must keep a cool head and get creative, reports Trevor Treharne.

One of the most stable economic environments in the world, Australia is also one of the most distinct.

An English-speaking, ‘Western’ country located at the foot of APAC, it is blessed with almost $1.6 trillion in metals and ore reserves. Only Russia and South Africa have more. 


A country so vast it has five different time zones, it also has a wide range of climates, from tropical and desert to alpine and monsoonal.

For risk managers in Australia and beyond, the ‘lucky country’ is beset with various prominent risks. The country faces many of the risk management challenges familiar to any global risk manager — supply chain disruptions, potential political risk and the fear of economic instability (though Australia has very little of this), and technological advances.

However, there are four major risk areas where Australia is particularly susceptible.


Analysis from KPMG found that over two-thirds of Australians are being impacted by natural disasters.

In recent years, the number of people in local government areas (LGAs) impacted by natural disasters has reached record highs, with almost one-third of Australians living in an LGA impacted by a bushfire event and around 70% impacted by a flooding event.

Discussing fire risk, Christina Knorr, director, CJK Fire & Safety says risk assessments are now widely seen in Australia, with the biggest trends being within the power storage industry.

“There is evidence that fire risk in south-eastern Australia is increasing, in terms of fire frequency, area burnt and fire severity.”

“The Australian Building Code has no good compliance provisions for large-scale battery storage facilities, hence why the risk assessment approach is chosen instead. Risk assessments, in my opinion, are more powerful than compliance assessments and should be considered by stakeholders where suitable,” says Knorr.

Hamish Clarke, senior research fellow at the University of Melbourne, says: “There is evidence that fire risk in south-eastern Australia is increasing, in terms of fire frequency, area burnt and fire severity. It’s complicated though, and teasing apart spatial and temporal patterns is difficult, particularly given the wide range of natural and human-caused drivers of fire risk.”


Tied to the risks around natural disasters are the threats that emanate from climate change.

The driest inhabited continent in the world, extremely high temperatures and drought are significant environmental threats to Australia, leading to an increased risk of bushfires.

In its report, The risks to Australia of a 3°C warmer world, the Australian Academy of Science stated that climate change could pose “potentially insurmountable challenges to its cities, ecosystems, industries, and food and health systems”.

“The unprecedented bushfire season in 2019-20 and the mass dying of corals on the Great Barrier Reef demonstrate how rapidly and fundamentally [Australia’s] global environment is changing with only 1.1°C of global warming,” said Professor Lesley Hughes, pro vice-chancellor (research) at Macquarie University in the report.


Australia has suffered a series of high-profile data breaches in recent years. In September 2022, one of the biggest security breaches in Australia’s history occurred with the Optus data hack, which affected 9.8 million customers.

Just three months later, Australian health insurance giant Medibank had a data breach impacting 9.7 million people. In March 2023, finance provider Latitude had a breach that hit 14 million customers.

Data breach graphic

Over recent years there have also been data breaches affecting Australia’s billion-dollar unicorn Canva, online proctoring service ProctorU, the Australian National University, Eastern Health, an operator of four Melbourne hospitals, Australian Parliament House, and the Northern Territory Government.

Already this year, the Labor Party admitted it had suffered Australia’s largest-ever government data breach, with key intelligence, defence and economic departments all falling victim.

“We can’t have a situation where we have data flying around the country, where we have critical infrastructure starting to fail”

In November 2023, the Australian Securities and Investments Commission said that 44% of the companies it surveyed had no plan in place to stop data breaches that originate from their supply chain partners.

“We cannot continue as we have [been],” cyber security and home affairs minister Clare O’Neil stated at the time.

“We can’t have a situation where we have data flying around the country, where we have critical infrastructure starting to fail, where we have small business and citizens who are continually telling us they feel vulnerable and unable to cope with the cyber threats themselves.”


Despite appearing to be a country with a laid-back demeanour, Australia has one of the world’s most comprehensive webs of regulatory frameworks. Risk managers must ensure their organisations meet strict guidelines.

The financial sector in Australia is regulated by the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission.

Work health and safety laws in Australia are stringent. There are strong privacy, environment, consumer and employments laws, too. All of this puts pressure on companies and their risk managers to meet gruelling compliance rules.

There are also specific risk management regulations. Last year, APRA introduced Prudential Standard CPS 230 Operational Risk Management, requiring firms to better manage risks and respond to business disruptions.

This regulatory stringency leans on organisations to strengthen operational risk management, improve business continuity planning and enhance third-party risk management.


“My number one tip for fire risk mitigation is tackling climate change,” says the University of Melbourne’s Clarke. “Managing fire is hard enough without cooking the climate system, which we are currently doing.

“There are many other tools at our disposal for mitigating risk, from fuel treatment and suppression, to community engagement and better planning and building regulations. There’s no silver bullet or one-size- fits-all solution.”

Knorr believes risk reduction is closely related to scenario planning and housekeeping procedures. “Risk management is a holistic approach and it is important to understand that having compliant fire safety systems is not always sufficient to reduce fire risks.

“So, when looking at fire risks, instead of saying ’if a fire starts’, risk managers should consider looking at the scenario of ’when a fire starts’. This automatically opens the door to questions about how, where, when and who,” says Knorr.

To mitigate cybersecurity risks, organisations should conduct regular risk assessments, implement employee training on best practices, and develop and update an incident response plan.

Mitigating regulatory compliance risks involves staying informed about industry-specific regulations, working closely with legal counsel to interpret changes, implementing robust internal controls, and conducting regular audits to ensure ongoing adherence.

Australia has many strengths, but to address these weaknesses requires proactivity and innovative risk management strategies. As Clarke says on the best approach to climate change concerns: “We need to throw everything we’ve got at it, we need to get creative, we need to try some new things.”