Briefing

Bank of Canada identifies climate change as a threat to the financial system

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The risks include insuring against damages to infrastructure caused by extreme-weather events, and the cost of shifting to a low-carbon economy. This is the first time the central bank has included climate change among its list of vulnerabilities to the financial system in its annual financial health report card. Alongside household debt and the housing market, cyber attacks were named as a significant threat. (Canadian Press)

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Talking point: This isn’t the first time the central bank has raised concerns around climate risk. In March, it joined a network of central banks that study climate change’s impact on financial systems and develop risk-management policies to deal with it. The federal government is starting to consider the issue, too. The 2019 federal budget included recommendations that companies disclose their carbon footprints and, later this spring, Ottawa’s Expert Panel on Sustainable Finance is expected to deliver its final report to the finance and environment ministers.