Canada to mandate climate disclosures for banks and insurers
The Canadian government is the latest to announce mandatory climate reporting requirements. According to the latest budget, federally regulated financial institutions such as banks and insurance companies will need to provide disclosures on their climate-related risks from 2024. These will be aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and are intended to support a “transition economy” to net-zero emissions.
Notably, financial institutions will be expected to collect and assess information on climate risks and emissions from their clients, in a step towards the introduction of climate reporting across a broad spectrum of the Canadian economy. The government also plans to require environmental, social and governance (ESG) disclosures from federally regulated pension plans
With the work of implementation yet to be done, we urge digital-first thinking now. Canada has the opportunity to get ahead of the curve and ensure that climate-related and other ESG disclosures are made in XBRL from the outset, ensuring maximum consistency, comparability and utility.