Thank you for inviting the Canadian Bankers Association to appear this afternoon to participate in the committee study of the environment and climate impacts related to the Canadian financial system.

My name is Bryan Radeczy, and I am director of financial stability with the CBA. I'm joined today by Darren Hannah, senior vice president, financial stability and banking policy.

The CBA represents more than 60 domestic and foreign banks employing over 280,000 Canadians who help drive Canada's economic growth and prosperity. We advocate public policies that contribute to a sound, thriving banking system to ensure that Canadians can succeed in their financial goals.

Climate change is a critical issue of our time, and banks in Canada are committed to doing their part to address it. Banks understand that the financial sector is central to securing an orderly transition to a low-carbon economy while also ensuring the continued resilience of our country's financial system. This includes working with clients across industries to help them decarbonize and pursue energy transition opportunities.

By financing the climate transition, banks are helping Canada meet its net-zero ambitions while also helping society meet interim energy demands in a volatile global context. Our six largest banks participated on the federal government's sustainable finance action council. We acknowledge the updates provided by the government earlier this month on plans for developing a Canadian taxonomy, and we look forward to further progress in this area.

A taxonomy should provide greater clarity and certainty for businesses investing in new technologies and projects for the energy transition and for the financial institutions supporting them. Notably, even in the absence of a Canadian taxonomy, our largest banks have made commitments in the hundreds of billions of dollars. This is reinforced by the commitments made by our six largest Canadian banks as members of the Net-Zero Banking Alliance.

Our banks prepare and issue climate and sustainability reports on an annual basis, with details on their missions, targets and progress towards achieving targets, along with information on their sustainable finance activities. Our banks are also engaged with regulators and standard setters, both domestically and internationally.

Following the release of the Basel Committee on Banking Supervision's climate principles in June of 2022, our Canadian banking regulator, the Office of the Superintendent of Financial Institutions, finalized its guideline B-15, on climate risk management, in March 2023. OSFI went a step further than the Basel committee at the time by including a set of minimum mandatory climate-related financial disclosure expectations spanning governance, strategy, risk management, and metrics and targets.

These disclosures are based on the Financial Stability Board's task force on climate-related financial disclosures, which our largest banks have been voluntarily implementing for a number of years. Our largest banks are now mandated to meet OSFI's disclosure expectations starting as of their 2024 fiscal year-end, with our small and medium-sized banks being similarly obligated starting as of their 2025 fiscal year-ends.

At a broader level, the International Sustainability Standards Board set about developing standards that would create a global baseline of sustainability disclosures. The ISSB built on the work of the task force on climate-related financial disclosures and published their inaugural standards in June 2023, including a climate-related disclosure standard. OSFI had already incorporated this standard into guideline B-15 in March of this year. Importantly, the ISSB standards are intended for broader application across industry systems, should they be adopted by national jurisdictions.

While OSFI has already taken steps in this regard, it is also notable that a new Canadian Sustainability Standards Board was established and consulted earlier this year on their inaugural standards that closely mirror the ISSB standards. We look forward to the CSSB finalizing its standards, which we hope will be adopted by other regulators and sectors across Canada.

To this end, we also acknowledge the government's interest in mandating climate-related financial disclosures for large federally incorporated private companies and in considering ways for small and medium-sized businesses to voluntarily release climate disclosures as well.

Investors and analysts are looking for harmonized international disclosures that facilitate comparability. We are encouraged that Canadian regulators and standard setters are engaging with their peers internationally and are already in the process of adopting global baseline standards in Canada.

A Canadian taxonomy will also be important in incentivizing greater levels of sustainable finance. Governments, regulators, standard setters, banks and the private sector all have a role to play in taking concrete actions that support the energy transition in Canada. We believe it is important to recognize the progress that has been made to date, but we acknowledge that more work remains to be done.

Thank you, and we look forward to your questions.