Toronto — In response to the release of Guideline B-15 on climate risk management by the Office of the Superintendent of Financial Institutions, Greenpeace Canada senior energy strategist Keith Stewart said:

“These guidelines are focused on protecting the banks from climate change risks, when they should be focused on protecting the climate from the banks’ risky pursuit of fossil fuel profits. Better risk disclosure is not enough. Climate change is a systemic risk to our financial system, so the Minister of Finance needs to take responsibility for modernizing our financial regulatory safeguards to deal with this unprecedented threat.” 

Notes to media

  • Canada’s Big 5 banks are all in the top 20 of global funders of fossil fuels. By over-financing the fossil fuel industry, they are fueling the climate crisis and increasing our exposure to major disasters like the recent floods and wildfires in B.C. The stakes in the climate crisis are simply too high to allow banks to regulate themselves. 
  • If OSFI wants us to have confidence in the Canadian financial system, they have to require the banks to stop financing the climate crisis and align their business plans with limiting warming to 1.5 degrees Celsius. As outlined by the United Nations, that means immediately ending the funding of new fossil fuels and cutting financed emissions in half by 2030 on the road to a complete phase out of support for fossil fuels.  

The table below summarizes Greenpeace Canada’s recommendations versus what is in the new guideline. Over 2,900 Greenpeace supporters made submissions to the OSFI in response to their public consultation on climate risks.

Greenpeace recommendationOSFI Final Guideline (quotes are from OSFI response to consultation feedback
Adopt a precautionary approachB-15 Guidance is firmly rooted in a risk management approach.
Issue binding rules rather than guidelinesOSFI adopted a principles-based approach:  “By developing principles-based guidance wherever possible, OSFI focuses on achieving positive risk outcomes at FRFIs and FRPPs, rather than formal compliance with detailed rules.”
Double materiality: Include the risk that bank business plans (including funding fossil fuels) pose to the climate, not just the risk of climate change to bank business models.  Only addresses risks climate change poses to banks. OSFI rejects double materiality and implies that it would be beyond its legislative mandate to adopt it: “OSFI approaches climate risk management through the lens of its legislative mandate.”
1.5C-Aligned Plans: Require banks to submit 1.5C-aligned plans, with interim targets for each five year period, and penalties for non-compliance.Banks must develop ‘Climate Transition Plans’ and consider their viability in different climate scenarios (including 1.5 degrees).No penalties for non-compliance.No requirement for banks to stop funding fossil fuels or adopt science-aligned interim targets (e.g. UN’s Race to Zero criteria).Banks must stress-test against a 2 degree or less scenario. 
Capital Requirements: integrate climate-related financial risk into capital rules, including by increasing capital requirements for lending to fossil fuel and other high-carbon activities. This should go beyond protecting banks against climate-related default risk, and be used to help channel finance towards reducing emissions and accelerating the transition away from fossil fuels.Financial institutions are required to incorporate climate-related risks into their own Internal Capital Adequacy Assessment Process, but OSFI is not telling them how to do that: “OSFI continues to assess whether its regulatory capital framework captures the unique features of climate-related risks.”
Credit Guidance: implement additional credit guidance policies (e.g. ceilings and floors on credit allocation and interest rates) as needed to ensure banks’ financing activities are 1.5C-aligned.Not included.
Climate Risk Disclosure: require strong, TCFD-aligned climate-related risk disclosures by the banks, including publicly-available 1.5C stress tests.B-15 has good disclosure requirements.
Include full lifecycle (scopes 1-3) emissions.Scopes 1-3 included in disclosure requirements.


For more information:

Keith Stewart, Senior energy strategist, Greenpeace Canada

[email protected], 416 659-0294