OSFI launching consultation on climate change risks to pensions, financial institutions

The Office of the Superintendent of Financial Institutions is launching a three-month consultation on risks arising from climate change that can affect the safety and soundness of federally-regulated pension plans and financial institutions.

Along with a discussion paper, the consultation’s objective is to understand how plans and institutions identify, measure and build resilience to climate risks and the OSFI also aims to get feedback on how it can facilitate preparedness for, and resilience to, these risks.

Read: Applying climate scenario risk analysis to DB pension plans

The paper will share the OSFI’s insights on possible tools for enhancing preparedness and resilience to these risks, including the relative role and importance of capital requirements, the supervisory review process and market discipline, according to a press release.

“Climate-related risks are difficult to predict, but will affect most sectors of the economy sooner rather than later,” said Ben Gully, assistant superintendent for the regulation sector at the OSFI, in the release. “The submissions received and the discussions that will occur will support effective climate risk management and contribute to the resilience of the Canadian financial sector.”

The OSFI is welcoming comments and submissions until April 12.