Amid concerns about the effects of climate change on financial stability, the Bank of Canada is joining a global group of central banks devoted to addressing climate risks.
Canada is signing on to the Central Banks’ and Supervisors’ Network for Greening the Financial System (NGFS), which was established in 2017 to develop best practices for managing climate risk, and to study green finance.
“The importance of climate-related issues for financial stability and monetary policy have become increasingly clear. This is particularly true for Canada, where resources play a vital role in our economy and where the natural environment is a defining feature of our national identity,” Stephen Poloz, governor of the Bank of Canada, said in a statement.
“Joining this network is part of the Bank’s broader efforts to understand climate-related risks for the Canadian economy and financial system,” he added.
Those efforts include measures such as incorporating climate-related risks into its financial system review process, reducing the bank’s own environmental footprint and developing a research plan focused on climate risks.