New government guidance supports better climate risk management across the public sector

Climate-related risks are becoming an increasingly important consideration for public sector organisations across Australia. In response, the Australian Government has released new guidance through the Climate Risk and Opportunity Management Program to help organisations identify, assess and manage climate-related risks and opportunities in a structured and consistent way.

While some of the resources have been developed specifically for local government, the guidance provides support that is relevant across the broader public sector. Its release reflects the growing recognition that climate-related risks need to be considered alongside other strategic, operational and financial risks.

With extreme weather events affecting infrastructure and service delivery alongside changing policies, funding priorities and community expectations, public sector organisations are operating in an increasingly complex environment. The new guidance provides a useful starting point for building capability and embedding climate considerations into decision making processes.

Climate risk is more than an environmental issue

Historically, climate change has often been viewed through an environmental or sustainability lens. In 2026, climate change is a governance and decision-making issue.

Public sector organisations are responsible for critical services, community assets and long-term planning decisions. Climate-related risks can influence all of these areas, whether through physical impacts such as flooding, bushfires and heatwaves, or transition impacts associated with policy changes, technological developments and evolving stakeholder expectations.

The guidance highlights the importance of understanding these different risk categories and taking a structured approach to assessing their potential impacts. This is particularly important for organisations seeking to build resilience, manage uncertainty, and continue to deliver services effectively into the future.

A structured approach supports better decisions

Many public sector organisations are grappling with how climate-related risks could affect future operations, assets, service delivery and community outcomes.

One of the key themes reflected in the new guidance is the importance of taking a structured approach to climate risk management. This can help organisations identify potential exposures, assess priorities and better understand the impacts on infrastructure, assets, service delivery and community outcomes.

By considering climate-related risks in policy development and decision-making processes, public sector organisations can better support resilient services, infrastructure and communities.

Importantly, climate risk management should not be viewed as a standalone exercise. The most effective approaches embed climate considerations into existing governance, planning and risk management processes, creating a stronger foundation for informed strategic and operational decisions.

Building capability across the public sector

The release of the guidance recognises that climate risk management capability will remain an important focus area across state, territory, and local governments.

As climate-related risks continue to evolve, public sector organisations will need to build internal knowledge, improve risk awareness and develop processes that support ongoing assessment and review. This is particularly important given the long-term nature of many public sector decisions, including infrastructure investment, asset management and community planning.

Through our work with public sector organisations, we have seen that building climate risk capability is rarely about creating entirely new processes. The most proactive approaches typically build on existing governance, risk management and planning frameworks, helping organisations incorporate climate considerations into decisions they are already making about infrastructure, assets, services and communities.

For public sector organisations beginning their climate risk journey, the resources released through the Climate Risk and Opportunity Management Program provide a useful starting point for building capability and embedding climate considerations into existing decision-making processes.

How BDO can help

BDO works with public sector organisations to identify, assess and manage climate-related risks and opportunities.

Our sustainability team supports clients with climate risk assessments, governance and risk management frameworks, scenario analysis, financial impact assessments and broader sustainability strategies. We help organisations understand how climate-related risks may affect their operations and decision-making, while building realistic, proportionate approaches aligned with their objectives. Contact our team today.