Superintendent Peter Routledge participates in panel discussion on sustainability disclosure in Canada hosted by the CSSB and UN PRI

TORONTO, Nov. 26, 2025 /CNW/ - On November 25, 2025, Superintendent Peter Routledge participated in panel discussion on sustainability disclosure in Canada hosted by the Canadian Sustainability Standards Board (CSSB) and the UN Principles for Responsible Investing (PRI), in Toronto, Ontario.

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Moderator:

A few days ago, OSFI released a report from its Climate-Related Risk Returns, with insights on the state of climate-related data and its impact on financial stability from Canada's financial institutions. Can you share what you're hearing nationally and internationally about sustainability disclosure, data, and remaining resilient to climate risks?

Superintendent Peter Routledge:

• The release of OSFI's Climate Risk Return report is a key milestone in strengthening Canada's financial system's ability to measure and disclose climate-related risks. For the first time, major banks and insurers have submitted detailed data on their physical and transition risk exposures—linking climate risks to credit, market, and insurance metrics, and integrating them into governance and risk management. These disclosures are submitted to OSFI for supervisory purposes only – we are not requiring institutions to post them publicly.
• While this marks progress, the returns also highlight persistent gaps in data availability, granularity, and consistency—issues shared globally. That's why this first step matters: it establishes a prudential data infrastructure to move from anecdotal to measurable insights, laying the groundwork for all federally regulated financial institutions ahead of 2026.
• Internationally, we're seeing momentum toward harmonized sustainability disclosure frameworks. OSFI's approach, aligned with the Canadian Sustainability Standards Board and International Sustainability Standards Board, supports globally comparable, decision-useful disclosures embedded in financial reporting.
• There's also strong consensus that climate risks be treated as financial risks—reflected in OSFI's supervisory framework. Reliable, granular data is essential to translate climate risks into financial metrics, and OSFI's Climate Risk Return, the Bank of Canada's scenario work, and CSSB's standards are complementary parts of a system connecting science, finance, and oversight.
• I'd also like to point out that Canada is a leader here - no one else in the world is doing this. It's a unique strength for our industry and a global reference point for integrating climate risk into financial stability.

Moderator:

With some Guideline B-15 climate disclosure expectations coming into force this year for Small- and Medium-Sized Deposit Taking Institutions and other insurers, how is OSFI supporting organizations in meeting these expectations? How are these expectations benefitting these institutions and the broader financial ecosystem within the context of the transition to a low-carbon economy?

Superintendent Peter Routledge:

• The implementation of Guideline B-15 is a key part of OSFI's broader strategy to enhance climate resilience across Canada's financial system. We recognize that smaller institutions may face unique challenges in building capacity and accessing the necessary data and expertise.
• That's why OSFI is taking a prudential and practical approach. We've been engaging directly with institutions through technical briefings and bilateral discussions to clarify expectations and provide guidance. We've been building capacity before rolling out disclosures to all institutions to ensure they have the right tools and knowledge they need to succeed. This proactive approach is something others internationally should follow. We're also working to ensure that our supervisory approach remains proportionate, recognizing the diversity in size, complexity, and risk profiles across institutions.
• These disclosures are not a compliance exercise—they are a strategic enabler. By integrating climate risk into governance, risk management, and scenario analysis, institutions gain a more forward-looking view of their exposures. They can identify concentrations of risk, stress-test their portfolios, and make more informed decisions on pricing, lending, underwriting, and capital allocation.
• At a system-wide level, the disclosures in Guideline B-15 are helping to build the data architecture of a more transparent and informed financial ecosystem. They contribute to better risk pricing, more efficient capital allocation, and ultimately, a more stable financial system that can withstand the growing impacts of climate change.
• We know this is a journey, and OSFI is committed to walking it with industry iteratively, collaboratively, and with a clear focus on resilience and financial stability.

Moderator:

In September, the AMF and OSFI released insights from the Standardized Climate Scenario Exercise. Can you talk a bit about how federal institutions are addressing and preparing for climate risk?

Superintendent Peter Routledge:

• The release of insights from the Standardized Climate Scenario Exercise (SCSE), conducted with the Autorité des marchés financiers, marks a major step in understanding how federal financial institutions are preparing for climate-related risks.
• Before this exercise, most institutions had limited experience with climate scenario analysis, geocoding, and using flood and wildfire hazard maps. For example, only 15% of deposit-taking institutions, 23% of life insurers, and 56% of property & casualty insurers reported prior experience using flood and wildfire hazard maps. By applying standardized frameworks, the SCSE helped build foundational capabilities—enabling institutions to assess and measure climate risks more consistently. Learning how to judge the risk in an empirical way is the first real step toward risk measurement.
• This first-of-its-kind initiative engaged over 250 institutions across banking and insurance. Results showed that institutions can absorb climate-related losses in the short to medium term. However, over the long term, physical hazards will intensify in non-linear ways, where small increases in warming could trigger disproportionately large impacts—especially for institutions with concentrated exposures.
• The exercise also revealed areas for improvement. Institutions need to do more to integrate climate risk into core business functions, particularly underwriting, strategic planning, and enterprise risk management.

Moderator:

We hear a lot about sustainability risks. Yet, Canada faces a pivotal moment. Our resource-rich economy affords us an opportunity to lead globally in the transition to a low-carbon economy. The International Energy Agency reported in June that, this year, investment in clean technologies ($2.2 trillion) is set to double that of investment in fossil fuel technologies ($1.1 trillion). I'd like to hear from each of our panelists on this. At this crucial moment, how is your organization helping Canada remain competitive to benefit from the global transition to a low carbon economy? How is your organization navigating external headwinds while staying focused on supporting organizations with what matters most – whether it be disclosures, a Canadian taxonomy, transition planning, or other topics?

Superintendent Peter Routledge:

• At OSFI, our role is not to drive climate policy, but to ensure that financial institutions are equipped to manage the risks and how they affect the safety, soundness, and stability of the financial system. At the same time, we need to balance our approaches so that institutions can seize the opportunities that come with this shift.
• We're helping institutions build their capabilities to measure and price climate-related risks accurately. Through initiatives like Guideline B-15, the Standardized Climate Scenario Exercise, and the Climate Risk Returns, we're laying the foundation for consistent, data-driven approaches to risk quantification.
• We also see promise in the development of a Canadian climate taxonomy. A well - designed taxonomy could help institutions better understand and classify economic activities based on their environmental impact. It would also support more informed risk assessments and potentially influence capital allocation through differentiated risk weightings, something we're watching closely, including how other jurisdictions like Australia are approaching it.
• Ultimately, our goal is to ensure that Canada's financial institutions are not only resilient to climate-related risks but also well-positioned to support and benefit from the transition to a low-carbon economy. This is a challenge, but it's also an opportunity to innovate, invest, and lead.

SOURCE Office of the Superintendent of Financial Institutions