USING SCENARIO ANALYSIS TO ASSESS CLIMATE TRANSITION RISK
Bank of Canada/Office of the Superintendent of Financial Institutions, Climate Scenario Analysis Pilot
The Bank of Canada (BOC) and the Office of the Superintendent of Financial (OSFI) have undertaken a climate scenario analysis in an effort to improve authorities’ and regulators’ understanding of financial institutions’ governance and risk management practices.
The pilot, undertaken with the collaboration of six Canadian financial institutions, evaluated climate-related risks and opportunities to the Canadian economy and to the financial system.
Future work will develop capabilities for top-down climate scenario analysis. The goal will be to assess potential systemic risks and to support Canadian financial institutions’ abilities to undertake climate risk assessment and disclosures.