Canada's Office of the Superintendent of Financial Institutions (OSFI) published remarks by Superintendent Peter Routledge on what the first fiscal year-end 2024 Climate Risk Returns, filed by 10 of Canada’s largest institutions, revealed about physical and transition climate risk exposures. He said the returns provide comparable, detailed visibility across institutions and will be expanded to over 250 institutions in 2026 to improve granularity and sharpen OSFI’s supervisory approach. The returns allow asset exposure information to be combined with physical peril data sets to identify vulnerabilities and concentrations, with catastrophic physical climate risks concentrated in residential and commercial real estate, corporate loans, sovereign bonds and public sector entities. Sector-level asset and emissions exposure breakdowns also show which institutions are more exposed to higher-emitting sectors and which may be more sensitive to future emissions-reduction policy changes, with OSFI calling for stronger climate data discipline and improved emissions measurement to support accurate pricing of climate risk. For climate risk management, OSFI pointed to property and casualty insurers’ more advanced physical-risk assessment frameworks, flagged the need for life insurers to strengthen physical risk assessment of their asset portfolios, and said banks should prioritize property-level geocoding to enable catastrophe-model overlays; it also expects insurers to move beyond one-year horizons by incorporating multi-year, multi-event scenarios, secondary perils and compounding events into stress testing and to focus modelling on impacts to earnings volatility, capital adequacy and reinsurance strategies. Routledge also described OSFI’s approach as aligned with the Canadian Sustainability Standards Board and International Sustainability Standards Board in support of harmonized, decision-useful disclosures embedded in financial reporting, and set out 2026 priorities focused on improving how institutions measure and price climate-related financial risks using better data, geospatial analysis and consistent scenario design, and embedding climate risk into governance, underwriting, capital and strategic planning, and enterprise risk management.
Office of the Superintendent of Financial Institutions 2026-02-04
Canada's Office of the Superintendent of Financial Institutions reports early findings from Climate Risk Returns and expands reporting to over 250 institutions
Canada's Office of the Superintendent of Financial Institutions (OSFI) revealed significant climate risk exposures in major sectors from the first fiscal year-end 2024 Climate Risk Returns, calling for enhanced data discipline and emissions measurement. Superintendent Peter Routledge emphasized improved climate risk management, aligning with sustainability standards, and outlined 2026 priorities for better data use, scenario design, and integration of climate risk into governance and strategic planning.