Office of the Superintendent of Financial Institutions
The Office of the Superintendent of Financial Institutions (OSFI) is extending the comment period for the public consultation processes on Draft Revised Guideline B-10 Third-Party Risk Management and Draft Guideline B-15 Climate Risk Management until September 30, 2022.
OSFI will communicate any subsequent changes to the planned publication schedules of these final guidelines at a later date.
Today the Office of the Superintendent of Financial Institutions (OSFI) begins consultations on draft Guideline B-15:
Climate Risk Management, which sets out expectations related to federally regulated financial institutions’ (FRFIs) management of climate-related risks.
Climate-related risks, which include physical and transition risks, could have significant impacts on the safety and soundness of FRFIs, and the financial system more broadly. These risks may manifest over varying time horizons and are likely to intensify over time. Building financial resilience against climate-related risks requires FRFIs to address vulnerabilities in their business model, their overall operations, and ultimately on their balance sheet.
The draft guideline incorporates
stakeholder feedback on the 2021 discussion paper
Navigating Uncertainty in Climate Change. It also considers the results from the
2021 Bank of Canada-OSFI scenario analysis pilot report. As part of this guideline, OSFI is introducing mandatory climate-related financial disclosures, as disclosures incentivize improvements in the quality of the FRFI’s governance and risk management practices over time and contribute to public confidence in the Canadian financial system.
Given the pace of change in climate risk management, OSFI intends to review and amend this guideline as practices evolve and standards harmonize. OSFI will consider adding new chapters with enhanced expectations in areas such as climate scenario analysis and capital and liquidity adequacy in future iterations of the guideline.
OSFI welcomes public comments to draft Guideline B-15 and will host an information session for FRFIs later today to provide an overview of the draft guideline and an opportunity to raise questions.
OSFI requests stakeholders to submit comments to
ClimateRisks-RisquesClimatiques@osfi-bsif.gc.ca by August 19, 2022, and plans to issue the final guideline by early 2023, along with a non-attributed summary of comments received and its response.