Canada’s monetary regulator, the Workplace of the Superintendent of Monetary Establishments (OSFI), introduced a brand new replace to its climate-related monetary disclosure expectations for banks and insurance coverage corporations, together with a big delay to the requirement for corporations to reveal the emissions originating of their mortgage books and underwriting actions, which had been set to start subsequent 12 months.
Launched in March 2023, OSFI’s preliminary necessities for climate-related disclosures from federally regulated monetary establishments begins reporting on fiscal 2024, beginning with massive establishments, adopted by smaller corporations the next 12 months, with banks and insurance coverage corporations anticipated to report on a variety of things throughout governance, technique, threat administration, and metrics & targets. Key governance and technique disclosure necessities embody reporting on recognized climate-related dangers and alternatives, in addition to how administration assesses and the board oversees them, the impression of the dangers and alternatives on the establishment’s enterprise and technique, and an outline of the establishment’s local weather transition plan.
The climate-related disclosure necessities additionally embody reporting of Scope 1, 2 and three greenhouse gasoline emissions. Disclosures of operational Scope 1 and a pair of emissions had been additionally set to start with fiscal 2024, whereas reporting on Scope 3 emissions, together with financed and insured emissions, had been slated to begin a 12 months later, with reporting starting for 2025 for big establishments and 2026 for smaller corporations.
Within the new replace, nonetheless, OSFI revised the implementation date of Scope 3 emissions reporting to start for fiscal 12 months 2028, three years after the preliminary expectation. The regulator defined that the replace is being made to make sure that its steering aligns with the just lately launched necessities of the Canadian Sustainability Requirements Board (CSSB) requirements.
The CSSB, which was fashioned to create Canadian Sustainability Disclosure Requirements (CSDSs) largely aligned with the IFRS Basis’s Worldwide Sustainability Requirements Board (ISSB) requirements had been launched in December 2024. Whereas the ISSB requirements included 1-year reliefs for reporting on Scope 3 emissions, nonetheless, the CSSB prolonged this reduction to three years.
Along with extending the timeline for financed emissions, OSFI’s replace additionally included an implementation date for the disclosure of off-balance sheet emissions, reminiscent of these from capital markets actions, with reporting set to start on fiscal 12 months 2029.
In its replace, OSFI stated:
“Though the alignment with the CSSB offers extra transition reduction for the disclosure of Scope 3 greenhouse gasoline emissions, we count on federally regulated monetary establishments to proceed to make progress in understanding, measuring, and managing their climate-related dangers in accordance with the expectations in Guideline B-15.”
