Thank you. Good morning, Mr. Chair, ladies and gentlemen, members of the committee.
Thank you for the opportunity to speak about the Office of the Superintendent of Financial Institutions and its approach to climate change. I am joined by my friend and colleague Stéphane Tardif, who is the managing director of OSFI's climate risk hub.
Climate change is a financial system risk because it will alter the cashflows generated by some financial assets and businesses. For example, stronger and more frequent national disasters are changing the economic fundamentals in some insurance segments.
OSFI's purpose is to contribute to public confidence in the Canadian financial system.
To fulfill our purpose, we must ensure that Canadian financial institutions manage the risks that could impact their safety and soundness. Among these risks are the physical and transition risks associated with climate change.
We have made tremendous progress towards this objective over the last 18 months. We created a new climate risk hub, which Mr. Tardif leads, and we've grown his team to over 30 people from about two just over a year ago. All of them are dedicated to leading OSFI's response to climate-related risks.
On March 7 of this year, we released our first-ever guideline, B-15, on climate risk management, to accelerate Canadian financial institutions' readiness to manage climate-related risks.
When developing this guideline, we met with representatives across all sectors, including members of the public in all regions, to better understand the impact of our regulations on their businesses. We received over 4,300 submissions during the most extensive consultative process in OSFI's history.
Our consultations produced a balanced, sensible regulatory approach that will help Canada's financial system navigate and adapt to the uncertainties and risks presented by climate change. Our supervision of climate risk management is not one-size-fits-all. It enables the institutions we regulate to adapt their approaches to climate risk management in a manner that supports both competitive and prudential aspirations.
That said, we acknowledge that we have a bias towards early action in adapting to climate change, and one might ask why.
Our climate scenario analysis indicates that a financial system that starts climate change adaptation early and progresses more gradually on this path is a sounder financial system. Thus, our approach stems from the underlying purpose assigned to OSFI by Parliament.
Thank you very much, and we're happy to take your questions.