Superintendent Routledge participates in a fireside chat at the 2026 CatIQ conference

Check against delivery

Moderator:

What did the fiscal year end 2024 Climate Risk Returns reveal?

Superintendent Peter Routledge:

• The Climate Risk Returns from the first cohort of filers, 10 of the largest institutions in Canada, provide us with a comparable, detailed picture of exposures across institutions for both physical climate risks and climate transition risks.
• We can now layer that asset exposure information with physical peril data sets and see where there are vulnerabilities and concentrations. For example, we saw that catastrophic physical climate risks are concentrated in areas including residential and commercial real estate, corporate loans, sovereign bonds, and public sector entities.
• The returns also provide detailed economic sector breakdown of assets and emissions exposures, allowing us to see which financial institutions are more exposed to higher emitting emission sectors and which ones might be more sensitive to emission reduction policy changes in the future.
• Overall, the returns gave us unprecedented visibility, but also a clear message: institutions should continue building climate data discipline and improved emissions measurement to price climate risks accurately.
• This year we will onboard over 250 institutions. Having a full data set will provide us with additional granularity and greater insights into climate risk vulnerabilities to sharpen our supervisory approach moving forward.

Moderator:

What aspects of climate risk management should insurance companies focus on based on what has been learned?

Superintendent Peter Routledge:

• When it comes to climate risk management, our analysis clearly shows that P&C insurers have more advanced frameworks for assessing physical risk exposures, largely reflecting the nature of their underwriting activities and risk profiles.
• There is room for improvement on the life insurance side, particularly in relation to the assessment of physical risks to their asset portfolios. Banks, of course, also carry significant exposures to physical climate risk through their lending portfolios, and we expect them to prioritize property-level geocoding to improve analysis with catastrophe models for physical hazard overlays.
• Going back to P&C insurers, however, one area for further development is moving beyond the traditional one-year horizon that characterizes much of property insurance. While annual repricing provides some flexibility, we expect insurers to increasingly assess climate risk over longer horizons by considering multi-year, multi-event scenarios and their potential implications for business models. This includes more explicit treatment of secondary perils and compounding events within stress testing frameworks.
• Across all sectors we regulate, we are looking for institutions to model physical hazards, specifically their impacts on earnings volatility, capital adequacy, and reinsurance strategies rather than treating climate risk as a purely technical or modeling exercise.

Moderator:

How does OSFI see its approach to climate risk management relative to peer regulators globally?

Superintendent Peter Routledge:

• Climate‑related risks, as financial risks, continue to pose real threats to financial stability. Our climate scenario exercise and returns show clear evidence that these risks are escalating, not receding. These exercises also showed there are data and capability gaps that should be closed for the system to remain resilient.
• Internationally, we're seeing momentum is actually moving toward harmonized disclosure frameworks. OSFI's approach, aligned with the Canadian Sustainability Standards Board and International Sustainability Standards Board, supports globally comparable, decision-useful disclosures embedded in financial reporting.
• Our prudential mandate also requires us to stay the course. Even if some regions shift emphasis, OSFI's responsibility is to safeguard the stability of Canada's financial system. Institutions have made a lot of progress on their ability to quantify, manage, and prepare for the financial impacts of climate-related risks. This is progress we can't afford to reverse.

Moderator:

What are OSFI's priorities with respect climate risk management in 2026?

Superintendent Peter Routledge:

• Looking ahead, OSFI will continue to focus on assessing progress. We know that institutions are at different stages in their climate risk journey, and we're committed to supporting them through clear guidance and ongoing engagement. Our supervisory approach will also remain proportionate and pragmatic.
• A key priority for us is improving how institutions measure and price climate-related financial risks. This means promoting the use of robust, evidence-based methodologies—supported by better data, geospatial analysis, and consistent scenario design. It also means integrating climate risk into core business functions such as governance, underwriting, capital and strategic planning, and enterprise risk management.
• Our goal is to ensure that climate risk management becomes embedded in risk management frameworks and governance, not bolted on. You can expect to see continued collaboration, iterative refinement of expectations.
• Ultimately, the path forward is about financial resilience—ensuring that Canada's financial system can adapt, withstand, and thrive amid a changing climate.