Backgrounder: Insights from the 2025 Climate Risk Returns

Overview

In 2024, the Office of the Superintendent of Financial Institutions (OSFI) and its partners published Climate Risk Returns to collect climate-related financial data from financial institutions.

This year was the first submission cycle for these standardized reporting forms. Canada’s six systemically important banks and four internationally active insurance groups were the first institutions to file. Smaller and medium-sized institutions are preparing to file their first returns in 2026.

The lessons learned report looks at what the returns were meant to achieve, shares OSFI’s insights from the initial submissions, and outlines future amendments. OSFI published updated returns with the report.

Why it’s important

Climate-related risks can have financial impacts that could affect the stability and resilience of Canada’s financial system. These risks are complex, long-term, and uncertain, making them hard to measure.

The Climate Risk Returns matter because they help collect standardized data from financial institutions that will:

• improve institutions’ abilities to quantify and measure climate-related risks, enabling more accurate assessment of exposures and vulnerabilities.
• enable supervisors to identify shared risks and common vulnerabilities across institutions that could affect resilience of the financial system.

Reducing the likelihood of unexpected losses and addressing risks collectively rather than in isolation strengthens the resilience of the entire financial system.

The initial submissions:

• marked a significant step forward in building Canada’s capacity for climate risk measurement and reporting.
• showed how institutions are approaching climate-related data collection, reporting, and risk management.
• revealed key challenges including data gaps, reliance on proxies, and inconsistent reporting practices.
• captured new physical risk data from banks and insurers that were not previously captured in other regulatory returns.

OSFI will continue to take an iterative collaborative approach and will work with industry through data challenges and refining reporting expectations. These efforts will lay the foundation for consistent, comparable, and decision-useful climate risk data across the financial sector.

Implementation

Based on lessons learned from the initial submissions and industry feedback, OSFI is introducing amendments to the returns effective fall 2025. The amendments, intended to reduce burden and improve data quality include:

• removing certain reporting requirements to focus on material exposures.
• refining industry classification to focus on high-emitting sectors.
• clarifying definitions to reduce ambiguity and improve consistency.
• recommending supplemental notes and a project plan to support a more accurate assessment of the submissions.