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Canada’s financial industry regulator published a set of guidelines for banks, insurance companies and other regulated firms to assess and disclose climate risks.

Financial firms will need to release climate-related financial disclosures at least once a year, the guidance from the Office of the Superintendent of Financial Institutions said. The principles come into effect at the end of fiscal 2024 for larger banks and insurers and in 2025 for smaller firms, the regulator said in a statement.

The Canadian regulator is going ahead with its first climate framework as global financial bodies raise pressure on the industry to prepare for the risks associated with global warming. Banks must make assessments of clients’ environmental risks a part of their credit-granting process, the Basel Committee on Banking Supervision said in December.

“¹ú²úÒ»¸£Àû change and the global response to the threats it poses have the potential to significantly impact the safety and soundness of the Canadian financial system,” the Ottawa-based regulator said Tuesday.

The new set of guidelines “balances the concerns of stakeholders in all regions of Canada and remains in line with the expectations of global and domestic investors who fund Canadian federally regulated financial institutions,” Superintendent Peter Routledge said in a statement.

Photograph: A Canadian flag flies in a courtyard in the financial district of Toronto, Ontario, Canada, on Monday, Jan. 16, 2023. Photo credit: Galit Rodan/Bloomberg

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