OSFI seeks feedback on its draft standardized climate scenario exercise

News release - Ottawa -

Today, the Office of the Superintendent of Financial Institutions (OSFI) released its draft Standardized Climate Scenario Exercise (SCSE) methodology for consultation.

The SCSE aims to increase federally regulated financial institutions’ (FRFIs) understanding of their potential exposures to climate-related risks. It also aims to build their capacity to conduct climate scenario analysis and risk assessments. As a fully standardized exercise, the SCSE will also give OSFI a comparable quantitative assessment of climate-related risks across FRFIs.

Climate-related risks and the global response to the threats they pose have the potential to have prudential ​impacts on FRFIs and affect the safety and soundness of the financial system more broadly. The SCSE furthers robust climate risk management, which helps OSFI promote the adoption by financial institutions of policies and procedures designed to control and manage financial risks.

Foreign bank branches and federally regulated pension plans are not part of this exercise but are encouraged to take part and provide feedback during the consultation process.

Comments related to the draft methodology can be submitted to ClimateScenario-ScenarioClimatique@osfi-bsif.gc.ca until December 22, 2023.

“The adoption of sound climate risk management practices at financial institutions will give OSFI confidence that those institutions have the necessary policies and procedures in place to manage financial risks. We welcome feedback from all stakeholders on the Standardized Climate Scenario Exercise.”

- Peter Routledge, Superintendent of Financial Institutions

Quick facts

  • The SCSE builds on lessons learned from two joint projects with the Bank of Canada. The first was the 2021 pilot project that concluded with the report “Using Scenario Analysis to Assess Climate Transition Risk (PDF, 2.3 MB).” The second project, currently underway, assesses the exposure of residential real estate lending to flood risks.
  • The SCSE consultation will have two parts. The second part of the consultation will seek feedback on the draft technical instructions and a draft workbook for the SCSE in March 2024. Breaking the process into two parts gives stakeholders time to review the materials. It also gives OSFI time to reflect on stakeholder feedback.


OSFI – Media Relations