If OSFI is to faithfully protect Canada’s financial sector – at home and abroad – it should recommend to government that it looks before it leaps into low-GHG policies.

The Standardized Climate Scenario Exercise (SCSE) is an initiative by the Office of the Superintendent of Financial Institutions (OSFI) in Canada, aimed at enhancing the financial sector’s resilience to climate-related risks. This exercise is part of a broader global trend where financial regulators are increasingly focusing on climate-related financial risks.

Probe International’s submission to SCSE is concerned about the risks, particularly for the insurance and banking sectors, of government climate policies on the financial industry.

A key point in our submission follows:

The likelihood that Canada will kneecap its financial sector in its activities abroad is especially relevant given OSFI’s recognition of a risk of a disorderly transition in the global economy. Government action, which is the sole source of that disorder, needlessly exposes the financial sector to a crippling transition risk. If OSFI is to faithfully protect Canada’s financial sector – at home and abroad – it should do its utmost to recommend government look before it leaps into low-GHG policies that have the potential to do irreparable harm to Canada and its financial industry. 

The full-text version of our submission to the OSFI is available for download.