With global standards for environmental, social, and governance (ESG) reporting tightening, companies across regions are preparing to comply with mandates like the Corporate Sustainability Reporting Directive (CSRD) in Europe and OSFI’s Regulation B-15 in Canada. Both frameworks require financial institutions and their clients to report detailed emissions data, making early preparation and data accuracy essential.

The CSRD and OSFI’s Regulation B-15: Key Requirements

The CSRD, effective in 2026, aims to create consistent sustainability reporting across the European Union. It requires companies to collect data on approximately 1,000 metrics, covering greenhouse gas emissions, energy usage, and social impacts. This directive mandates a “double materiality” approach, meaning companies must evaluate both financial materiality (how sustainability factors impact the business) and impact materiality (how the company affects society and the environment) (Harvard Law). To meet the 2026 deadline, companies will need to begin gathering data by 2025 (Grant Thornton).

In Canada, OSFI’s Regulation B-15 introduces similar requirements for federally regulated financial institutions, including banks and insurance companies. Enforced earlier this year, B-15 mandates that these institutions report their Scope 1, 2, and 3 emissions. This includes “financed emissions,” or the Scope 1 and 2 emissions of clients holding financial products, such as loans or insurance policies. OSFI also requires financial institutions to disclose any data gaps, estimates, or inaccuracies within their emissions reports (Government of Canada).

Both CSRD and Regulation B-15 reflect a growing regulatory demand for accurate and transparent data from financial institutions and, by extension, from the companies in their portfolios. For companies seeking to ensure accurate, hassle-free data collection, tools like Envirally allow for the streamlined tracking of Scope 1 and 2 emissions, minimizing the potential for human error and removing the need for complex spreadsheets. Additionally, organizations can turn to 360 Energy Inc. for expert advice on effective emissions management and planning to meet regulatory standards.

Steps to Ensure Compliance with CSRD and OSFI’s Regulation B-15

1. Begin Comprehensive Data Collection: Companies should start compiling relevant ESG metrics early. This includes energy usage, emissions data, and other information necessary for reporting Scope 1, 2, and, where relevant, Scope 3 emissions. Early data collection helps reduce the risk of last-minute discrepancies and improves data accuracy.
2. Conduct a Double Materiality Assessment: The CSRD requires companies to evaluate both the financial impact of sustainability issues and the organization’s societal and environmental impact. This assessment helps companies focus on key areas within sustainability reports (Harvard Law).
3. Develop Data Management Policies: Establishing clear policies around data collection, validation, and reporting will make compliance smoother. A standardized process can help maintain data integrity and provide a reliable foundation for the complex reporting requirements of both CSRD and Regulation B-15.
4. Coordinate with Financial Partners: Under Regulation B-15, companies with financial products from Canadian banks or insurers must provide emissions data that meets regulatory standards. These institutions are required to validate and disclose the accuracy of client emissions data, making accurate and timely reporting essential (Government of Canada).
5. Seek Specialized Support: Given the complexity of both the CSRD and OSFI’s Regulation B-15, companies may benefit from consulting with experts in data collection, reporting frameworks, and sustainability policy development. These advisors can assist with complex tasks like conducting double materiality assessments or organizing large-scale data management systems (Grant Thornton). Tools such as Envirally ensure accurate emissions tracking, while firms like 360 Energy Inc. provide guidance on emissions reduction strategies.

Conclusion: Navigating New ESG Reporting Requirements

OSFI’s Regulation B-15 and the European CSRD mark a global shift towards rigorous ESG standards. Financial institutions and businesses with financial ties are now expected to meet high standards of emissions transparency and accountability. By establishing effective data collection and management processes, companies can position themselves to comply with these evolving expectations, supporting sustainable growth and resilience in today’s business landscape.