Standardized Climate Scenario Exercise (SCSE)

The standardized climate scenario exercise (SCSE) is a climate stress test that participating financial institutions are required to undergo.

Climate-related risks, including physical and transition risks, could have significant impacts on the safety and soundness of financial institutions, and the Québec and broader Canadian financial system. Building financial resilience against intensifying climate-related risks requires institutions to address their vulnerabilities in their business model, their overall operations, and ultimately on their balance sheet.

Developed by the AMF and the Office of the Superintendent of the Financial Institutions (OSFI), 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.

This exercise will also enable financial institutions to optimize and harmonize their practices and be better equipped to comply with the Climate Risk Management Guideline (pdf - 421 KB)This link will open in a new windowUpdated on July 4, 2024, which sets out the AMF's expectations of financial institutions for the management of climate-related risks.

Documents

Reference

Public consultation on the Standardized Climate Scenario Exercise This link will open in a new window (finished on June 7, 2024 - in French only)