Canada pushes back requirement for banks, insurance companies to report financed emissions

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🗞️ Driving the news: The Office of the Superintendent of Financial Institutions (OSFI) in Canada has delayed the requirement for banks and insurance companies to disclose financed and insured emissions (Scope 3) until fiscal year 2028
• Originally set to begin in 2025 for large institutions and 2026 for smaller ones, the delay aligns with new standards from the Canadian Sustainability Standards Board (CSSB)
• The regulator also set a 2029 start date for disclosing off-balance sheet emissions from capital markets activities

🔭 The context: OSFI introduced climate-related financial disclosure requirements in March 2023, mandating banks and insurers to report on governance, strategy, risk management, and emissions
• Scope 1 and 2 emissions reporting begins with fiscal 2024, but Scope 3 emissions—linked to loan books and underwriting—are more complex to quantify
• The delay follows the CSSB’s decision to extend the ISSB’s 1-year relief for Scope 3 emissions reporting to 3 years.

🌍 Why it matters for the planet: Scope 3 emissions represent the largest share of financial institutions’ climate impact, making their disclosure crucial for transparency and accountability
• Delaying these requirements slows efforts to measure and mitigate the financial sector’s role in financing high-carbon activities
• However, OSFI maintains that banks and insurers must continue improving their climate risk assessments

⏭️ What's next: Large banks and insurers must still prepare for Scope 1 and 2 emissions reporting starting this year
• Financial institutions are expected to continue refining their methodologies for tracking and managing climate risks in anticipation of the new 2028 and 2029 deadlines
• Further regulatory developments may arise as Canada aligns its climate disclosure policies with international standards

💬 One quote: “We expect federally regulated financial institutions to continue to make progress in understanding, measuring, and managing their climate-related risks in accordance with the expectations in Guideline B-15.” – OSFI statement

📈 One stat: Scope 3 emissions disclosure delayed from 2025 to 2028 for large institutions and from 2026 to 2028 for smaller firms

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