The federal financial regulator issued a report detailing the results of a survey of financial institutions to assess their readiness for those deadlines, finding that most firms have “started, or have planned work, to manage their climate-related risks.”
Yet some financial institutions “are at very early stages of considering climate-related risks and how they will manage them, and more work is needed to accelerate progress in time for the guideline implementation dates.”
In particular, OSFI found that, while financial firms are making progress at adding climate considerations to their governance processes, they haven’t made as much headway when it comes to quantifying the impacts of climate-related risks.
“Climate-related risks are forward-looking risks, where empirical data and traditional risk management approaches and tools may not sufficiently identify and account for these risks. This could, in turn, lead to an inadequate capture of the potential risks and risk response,” the report said.
Among other things, the regulator found the industry still needs to ramp up its assessments of the impact of climate risks on their other financial and non-financial…
