Canada's big five banks rated on their climate change performance

TD and RBC lead the pack while BMO lags, in Ethical Funds executive brief

VANCOUVER - Canada's big five banks have all acknowledged the significance of global climate change, but all are moving at different rates to actually implement their environmental policies into concrete action plans, according to a new executive brief from The Ethical Funds Company.

Credit Risk, Biodiversity, and Climate Change concludes that all five of Canada's leading banking institutions are starting to take action on climate change but asks the crucial question: How are they doing so far?

"As a pillar of the Canadian economy, Canada's major banks have both a financial and social responsibility to take action on climate change," said Robert Walker, Vice President of Sustainability for Ethical Funds. "Our report clearly shows that all five banks have at least begun to rise to the challenge of climate change, but much more still needs to be done."

This latest executive research paper from Ethical Funds draws upon 25 climate-specific indicators found in its Corporate Sustainability Scorecard - a proprietary objective method of assessing corporations' environmental, social and governance performance. The research methodology also had a unique Canadian twist by focusing not just on carbon emissions management but also on efforts to preserve biodiversity generally and Canada's boreal forest specifically. This methodology allowed Ethical Funds to examine Canada's leading banks for: <<

- Carbon management and biodiversity policies
- Board oversight and management capacity
- Performance
- Transparency

"The responses to climate change from our major banks are evolving rapidly but, so far, almost all action has been at the level of policy development," said Walker. "While these are important first steps, many of the statements made by the banks on climate change are aspirational only and some include a disturbing amount of qualifying language. A failure to take action will only lead to charges of green-washing."

The report ends with a set of practical next steps each of the big five banks can take to avoid such allegations and to successfully move more aggressively on tackling climate change. Ethical Funds' executive research paper on the climate change performance of Canada's big five banks can be read in full at:

https://www.ethicalfunds.com/SiteCollectionDocuments/docs/bankreport.pdf

The results show:

(1) TD Bank Financial Group: From Worst to First Once viewed as a laggard on environmental risk assessment, TD Bank now occupies a leading position, tied with Royal Bank of Canada.

(1) The Royal Bank of Canada: An Established Leader RBC has led Canada's banking sector on environmental issues for more than a decade and continues to do so.

(3) Canadian Imperial Bank of Commerce: Climbing Up the Ladder CIBC lags behind TD and RBC but, with steadily increasing policy development and disclosure, is moving up the ladder.

(4) The Bank of Nova Scotia: More Disclosure Required While headway is being made at Scotiabank, it lags the top three when it comes to formalizing and disclosing lending procedures addressing climate risk.

(5) The Bank of Montreal: Falling Behind While BMO has acknowledged the science of climate change, there is little evidence that it is considering the risk from climate change in its lending portfolio.