At the Bank, we consider how climate change affects the economy, and we are reducing our own environmental footprint.
Assessing climate risks to the economy
The physical effects of climate change are apparent in the number and severity of extreme weather events, such as flooding, hurricanes and wildfires. The resulting financial losses can affect the financial system and the overall economy. And efforts to create greener economies have their own implications.
Through our research and analysis, we are considering whether our economy is adequately prepared to handle the effects of climate change and the transition to net-zero carbon emissions.
The macroeconomic implications of climate change
Together with the Office of the Superintendent of Financial Institutions and several Canadian financial institutions, we completed a climate transition scenario analysis pilot project in January 2022. Since then, we have continued our work to analyze and better understand the challenges that climate change poses to the overall economy.
As Canada’s central bank, it’s important for us to have a firm grasp on these implications. Understanding the potential impacts on growth, jobs and inflation is essential for us to effectively set monetary policy. That’s why we have continually updated our modeling frameworks to take into account the physical and economic impacts of climate change.
Greening our operations
Reducing our impact on the environment is important to us. We’ve been making changes to our day-to-day operations to decrease the risks we all face from a changing climate.
More information can be found in our annual Disclosure of Climate-Related Risks report.
Reducing carbon emissions from our operations
We’re taking steps to measure and reduce our carbon footprint and to integrate climate change into our planning and decision-making. We committed to reducing greenhouse gas emissions from our buildings by 80% by 2030 (compared with 2018 levels) and achieving net-zero operational emissions by 2050 or sooner. Since 2022, we have also used renewable sources for 100% of our electricity needs.
In 2019, we achieved LEED Gold certification for our renovated Ottawa headquarters, a milestone that was several years in the making.
Addressing our waste and water footprints
We have committed to achieving near-zero waste—producing as little waste as possible from our operations—across the buildings we own and our supply chain by 2040 or sooner. This includes diverting 75% of operational and plastic waste and 100% of construction waste by 2030. We’ve also committed to achieving near-zero water usage—using as little water as possible in our daily work—across the buildings we own by 2035 or sooner.
We are making significant progress with our other green initiatives, such as recycling the polymer from old bank notes to be repurposed as compost bins, garden furniture and decking material—to name a few.
Managing other risks we face from climate change
We evaluate other climate risks that the Bank faces as an institution.
This includes efforts to manage the risks associated with the investment portfolios in the Bank of Canada Pension Plan. We also consider environmental, social and governance (ESG) principles when managing the Pension Plan’s investments. Our current focus is on integrating ESG considerations into our investment decisions and reporting, while continuing to uphold our fiduciary responsibilities to Plan members.
Read our latest Pension Plan Annual Report.
Content Type(s):
Background materials
Research Topic(s):
Climate change