The potential impact of a disorderly transition to a low carbon economy is a top factor driving financial market regulators to accelerate and focus their efforts on climate-related risks, said Tamara DeMos, chair of the Canadian Association of Pension Supervisory Authorities’ environmental, social and governance committee and managing director of private pensions.
Speaking during the Joint Forum of Financial Market Regulators’ annual meeting earlier this month, DeMos added pension plans need to assess their resilience to climate-related risks and meet their fiduciary obligations in an uncertain economic environment. “[The pension sector’s] work with other regulators is key to finding timely and effective risk management expectations that help protect members and beneficiaries.”
The forum received presentations about climate change — in particular, the frequency, severity and costs of extreme weather events — as well as some private and public sector partnerships that are currently underway.
The forum also heard feedback from key stakeholders regarding a total cost reporting consultation by the Canadian Securities Administrators and the Canadian Council of Insurance Regulators. The consultation proposes enhanced cost disclosure reporting requirements for mutual funds and segregated funds, including periodic reporting to clients showing the ongoing costs of owning these funds.
Also speaking at the forum, Robert Bradley, chair of the CCIR and superintendent of insurance for Prince Edward Island, noted regulators are committed to bringing total cost reporting to market. “Policy holders and investors deserve to understand all costs associated with owning investment and segregated fund products and be able to more easily compare their performance.”