The AMF takes a data-based approach to understanding the potential impacts of climate change on financial institutions

Insurance Deposit institutions

Montréal – The Autorité des marchés financiers (AMF) today published the final version of the Standardized Climate Scenario Exercise (SCSE) intended for certain Québec financial institutions.

The SCSE is a tool for measuring financial institutions' potential exposures to climate-related risks. It supports a better understanding of the impacts of such risks on financial institutions, their counterparties and the financial sector more broadly. Specifically, the SCSE provides the opportunity to:

  • gather data that will help the AMF assess the potential risks associated with climate change and prepare for future challenges;
  • identify vulnerabilities in the financial system; and
  • build financial institutions' capacity to conduct climate scenario analysis and risk assessments.

The AMF is working with the Office of the Superintendent of Financial Institutions This link will open in a new window (OSFI). The AMF and OSFI are running the SCSE in parallel with the institutions under their respective supervision. In Québec, the financial institutions participating in the SCSE were selected by applying specific criteria based on their size, degree of exposure to climate-related risks and level of impact on the Québec financial system.

The financial institutions and the regulators supervising them need data-based information to be able to better assess and manage climate risks. The final version of the SCSE reflects the comments received as part of a consultation held in two parts, the first in the fall of 2023 and the second in the spring of 2024. The AMF and OSFI published a summary This link will open in a new window of the comments from the second consultation.

“What we are initiating today is the result of rigorous efforts made by our respective teams. I am looking forward to this fruitful collaboration with the Office of the Superintendent of Financial Institutions. The AMF needs a harmonized approach for the implementation of robust support for financial institutions in managing their climate-related risks, the impacts of which are considered systemic,” said Yves Ouellet, AMF President and CEO.

“The final version of the Standardized Climate Scenario Exercise is the result of over 18 months of planning and consultation. I would like to thank the Autorité des marchés financiers for their collaboration and those who provided comments. I look forward to seeing the results, which will advance climate risk management practices at financial institutions,” added Peter Routledge, Superintendent of Financial Institutions.

SCSE deadlines

  • December 13, 2024, for the credit and market risk modules.
  • January 24, 2025, for the flood risk and wildfire fire risk modules, the climate transition real estate exposure assessment, and the questionnaire.

The participating financial institutions may transmit the results of the exercise to the AMF via the secure transfer site provided for that purpose or by e-mail at [email protected]. The AMF and the OSFI will report the overall results in the spring of 2025.

Some points to remember

  • OSFI announced the first part of the SCSE consultation in October 2023 This link will open in a new window. The second part of the consultation, conducted jointly with the AMF, was announced in April 2024. The final version of the exercise, which is the product of 120 days of public consultation with 350 participants, includes a questionnaire that will be completed by the selected financial institutions.
  • The AMF and OSFI will receive only the results for the financial institutions under their respective supervision. The AMF and the OSFI have shared their data sources so that the exercise may be completed directly with the financial institutions.

Useful links

About the Autorité des marchés financiers

In its role as regulator, the Autorité des marchés financiers acts to maintain a financial sector that is dynamic, operates with integrity and warrants public confidence. It regulates, in whole or in part, activities in the following sectors: insurance, deposit institutions, securities and derivatives, distribution of financial products and services, mortgage brokerage and credit assessment.

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