OSFI launches consultation on climate-related risks in the financial sector

News Release

For Immediate Release

OTTAWA ─ January 11, 2021 ─ Office of the Superintendent of Financial Institutions

Today the Office of the Superintendent of Financial Institutions (OSFI) launched a three-month consultation with the publication of a discussion paper, Navigating Uncertainty in Climate Change: Promoting Preparedness and Resilience to Climate-Related Risks. The paper focuses on risks arising from climate change that can affect the safety and soundness of federally regulated financial institutions (FRFIs) and federally regulated pension plans (FRPPs).

Through this consultation, OSFI is seeking to engage FRFIs, FRPPs and other interested stakeholders in a dialogue on climate-related risks. OSFI is interested in how FRFIs and FRPPs define, identify, measure and build resilience to climate‑related risks. OSFI is also seeking feedback on how it can facilitate FRFIs' and FRPPs' preparedness for, and resilience to, these risks. This input will guide the development of regulatory and supervisory approaches that meet OSFI's mandate of protecting depositors, policyholders and private pension plan beneficiaries while allowing institutions to compete and take risks.

Climate-related risks can affect a FRFI's or FRPP's safety and soundness by driving financial, strategic and operational risks and by affecting a FRFI's reputation. The paper shares OSFI insights on possible prudential tools for enhancing preparedness and resilience to these risks. This includes the relative role and importance of capital requirements, the supervisory review process and market discipline.

OSFI welcomes comments and submissions on the discussion paper by April 12, 2021. Submissions should be sent to Climate-climat@osfi-bsif.gc.ca.


"Climate-related risks are difficult to predict, but will affect most sectors of the economy sooner rather than later. 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."

Ben Gully, Assistant Superintendent, Regulation Sector

Quick facts

Similar to regulators in other jurisdictions, OSFI categorizes climate-related risks that affect FRFIs and FRPPs as follows:

  • Physical risk, which arises from a changing climate increasing the frequency and severity of wildfires, floods, wind events and rising sea levels, among other things.
  • Transition risk, which stems from efforts to reduce greenhouse gas (GHG) emissions as the economy shifts towards a lower-GHG footprint.
  • Liability risk, which relates to potential exposure to the risks associated with climate-related litigation.

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About OSFI

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada, established in 1987, to protect depositors, policyholders, financial institution creditors and pension plan members, while allowing financial institutions to compete and take reasonable risks.

Media Contact

OSFI – Public Affairs