On May 26, 2022, the Office of the Superintendent of Financial Institutions ("OSFI") issued a draft of Guideline B-15: Climate Risk Management (the "Draft Guideline"). The Draft Guideline sets out OSFI's expectations related to the management of climate-related risks by federally regulated financial institutions ("FRFIs"), and which aims to support FRFIs in developing greater resilience to, and management of, these risks.1

The Draft Guideline incorporates findings from a number of other OSFI initiatives related to climate-related risk management – including the publication of and consultation on a discussion paper titled "Navigating Uncertainty in Climate Change" [PDF] and a joint climate scenario pilot project with the Bank of Canada, the results of which were published in a report titled "Using Scenario Analysis to Assess Climate Transition Risk" [PDF] on January 14, 2022. The Draft Guideline focusses on two core areas, the first being governance and risk management practices and the second being disclosure requirements. The Draft Guideline also identifies areas that may, in the future, be further developed.

Governance and Risk Management Practices

The Draft Guideline sets out a number of OSFI's expectations of FRFIs with respect to governance and risk management practices, including the following:

  1. To incorporate the implications of climate change and the transition to a low-greenhouse gas economy on the FRFI in its business model and strategy. OSFI expects FRFIs to develop and implement a climate transition plan, in line with their business plan and strategy, that guides their management of increasing physical risks from climate change (i.e., financial risks from the increasing severity and frequency of extreme climate change-related whether events, longer-term gradual shifts of the climate, and indirect effects of climate change such as public health implications) and transition risks towards a low-greenhouse gas economy (i.e., financial risks from current or future government policies, legislation and regulations, technological advancements, and changes in market and customer sentiment).
  2. To have appropriate governance, policies and practices in place to manage climate-related risks.
  3. To have instituted processes to adequately price climate risk-sensitive assets and liabilities and manage these exposures in accordance with their Risk Appetite Framework.
  4. To mitigate the impact of climate-related disasters on critical operations, including consideration of severe, yet plausible, climate-related disaster scenarios in decision making and business continuity and disaster recovery plans.
  5. To use climate scenario analysis to assess the impact of climate-related risk drivers on risk profile, business strategies and business models, including as part of the FRFI's Stress Testing Framework. OSFI will be developing a standardized climate scenario analysis exercise to assess aggregate exposure to physical and transition risks and compare FRFIs approaches to climate scenario analysis. FRFIs will be required to apply these scenarios and report their results to OSFI.
  6. To maintain sufficient capital and liquidity buffers for climate-related risks and to incorporate climate-related risks into the FRFI's Internal Capital Adequacy Assessment Process or Own Risk and Solvency Assessment Process, as the case may be.


The Draft Guideline also outlines a number of principles that provide guidance on OSFI's expectations related to climate-related financial risk disclosure. These align with the Task Force on Climate-related Financial Disclosures framework and are intended to incentivize improvements in the quality of institutions' governance and risk management practices related to climate. These principles include that FRFIs disclose relevant information (for example, the potential impact of climate-related risks and opportunities on the FRFI's markets, businesses and financial information, and, where applicable, an explanation as to its significance, and that the disclosure be: (i) specific and complete; (ii) clear, balanced and understandable; (iii) reliable, verifiable and objective; (iv) appropriate for the FRFI's size, nature and complexity; and (v) consistent over time so that users are able to understand the development and evolution of the impact of climate-related issues as well as to allow for inter-period comparisons.

The required disclosure must be implemented for the fiscal periods ending on or after October 1, 2023. FRFIs may determine where the disclosure is made (for example, in reports to shareholders or in standalone reports). OSFI expects these to be made publicly available at least annually and no later than 180 days after the FRFI's fiscal year-end.

Next Steps

Comments on the Draft Guideline may be submitted to OSFI until August 19, 2022. OSFI plans to issue a final version of Guideline B-15 by early 2023.


1. Office of the Superintendent of Financial Institutions, "Guideline B-15: Climate Risk Management" (May 2022).

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