The Office of the Superintendent of Financial Institutions (OSFI) has announced updates to its Guideline B-15: Climate Risk Management, aligning the operations of federally regulated financial institutions (FRFIs) with global sustainability standards, specifically the International Sustainability Standards Board’s IFRS S2 Climate-related Disclosures standard.
Through the updates, OSFI aims to promote transparency of climate-related risks while streamlining climate disclosures.
Additionally, OSFI is introducing new Climate Risk Returns to systematically gather data on emissions and exposures from FRFIs. The release follows a thorough consultation process, culminating in the publication of a “What We Heard” report that compiles the feedback. The collated data will be instrumental for OSFI in developing policies as part of its climate risk regulation and supervision.
“Over the last year, OSFI has made significant progress in promoting robust climate risk management by financial institutions,” said Peter Routledge, superintendent of Financial Institutions. “Today, we are taking another step by releasing updates to Guideline B-15 and new Climate Risk Returns.”
The initial version of Guideline B-15 was published in March 2023, with the changes poised to take effect at the fiscal year-end 2024 for domestic systemically important banks and internationally active insurance groups that are headquartered in Canada. All other FRFIs that fall within the scope of the regulation will be expected to comply by the fiscal year-end 2025.
OSFI has also committed to ongoing reviews and amendments to the guideline to ensure it remains in step with evolving practices and standards in climate risk management.
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