In the latest signal that climate risk is moving up the agenda of Western economies, Canada will require insurers and banks to provide disclosures on their climate-related risks and exposures beginning in 2024, according to the federal government’s latest budget.
Canada’s financial regulator, the Office of the Superintendent of Financial Institutions (OSFI) will require federally regulated financial institutions to publish climate disclosures aligned with the TCFD framework beginning in 2024, stating that it will use a “phased-in” approach for the requirements.
The budget also outlines over $9 billion in proposed funding to address climate change, and plans for a new green bond offering.
While the rules do not yet apply to other companies, OSFI will also expect the financial institutions to collect and assess information on climate risks and emissions from their clients. The government also expects to require ESG disclosures from federally regulated pension plans.
The budget also outlines plans for over $9 billion in proposed climate-related funding. Key areas of investment include:
- Over $3 billion to support zero emissions vehicles (ZEV), including purchase incentives and EV charging build-out
- More than $1 billion for green buildings and homes, as well as investments in renewable energy, clean agriculture technology, and nature-based climate solutions.
Additionally, the budget includes plans for $5 billion in green bond issuance over the next year. Canada completed its first sovereign green bond offer last month, raising $5 billion to help finance the country’s investments in green infrastructure and other climate and environmental protection-related projects.