Climate Change Data

Environmental Metrics

ESG Focus Areas

• Human interest
• Community Investment
• Environmental Sustainability
• Aboriginal Community Support
• Anti-Money Laundering
• Governance

Environmental Achievements

• Maintained carbon neutrality for the fifth consecutive year in energy use in buildings and employee business travel.

Social Achievements

• Employee Giving Campaign had an 89.3% participation rate, with over 42,000 employees contributing over $17 million to community charities.
• BMO Harris Bank extended 208 community development loans totaling more than $876.4 million under the Community Reinvestment Act (CRA).
• Over 5,300 employees contributed more than 15,000 volunteer hours to 221 not-for-profit organizations.
• More than 1,350 employees contributed 6,790 hours to over 150 organizations through United Way/Centraide Days of Caring.
• Raised over $1.3 million for Kids Help Phone through Walk So Kids Can Talk.
• Named one of the Best 50 Corporate Citizens in Canada for the 14th consecutive year by Corporate Knights.

Governance Achievements

• Ranked first place overall in Report on Business Board Games 2014 for governance practices.
• Won the Innovation Award for best practices in compliance systems (large department) in 2014.

Climate Goals & Targets

Environmental Challenges

• Balancing commitments to customers, employees, communities, and shareholders.
• Understanding when to weigh desirable actions against what is possible.
• Keeping pace with increasingly complex and rigorous AML regulations.

Mitigation Strategies

• Rigorous governance framework overseen by the Board of Directors and Sustainability Council.
• Regular consultations with key stakeholders.
• More than doubling the size of the Financial Investigations Unit (FIU) in the past year.
• Comprehensive AML training programs for employees.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Internationally recognized sustainability framework

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Best 50 Corporate Citizens in Canada (Corporate Knights)
• Canadian Corporate Champion of the Arts Award
• Innovation Award for best practices in compliance systems

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Achieved carbon neutrality in operations annually since 2010
• Achieved 100% renewable electricity supply annually since 2020
• Purchased carbon credits equalling 5,750 metric tonnes of CO2 removal and reductions through an agreement with CarbonCure Technologies

Social Achievements

• Launched the BMO Climate Institute
• Rolled out enterprise-wide “Climate Change Essentials” training for all BMO employees, management and Board of Directors
• Increased allocation to the Impact Investment Fund to $350 million

Governance Achievements

• Established Board-approved Environmental and Social Risk Corporate Policy
• Expanded Climate Scenario Analysis (CSA) team and built out internal capacity to conduct climate-related scenario analysis
• Incorporated Climate Ambition as a key element of our corporate strategy

Climate Goals & Targets

Environmental Challenges

• Significant challenges and complications in quantifying financed emissions with metrics suitable for target-setting, largely because reporting across industry sectors is not yet standardized and in many cases data quality is low or data availability is limited
• Data challenges in quantifying financed emissions for agriculture due to lack of farm-level emissions or production data

Mitigation Strategies

• Partnering with third-party data providers and making investments in our enterprise data analytics initiative
• Developing sector-specific approaches for carbon-intensive sectors in our portfolio
• Using the best available data in accordance with the PCAF Standard’s data hierarchies

Supply Chain Management

Supplier Audits: Engaged approximately 70% of supplier spend through CDP Supply Chain program in 2022

Responsible Procurement

• Supplier Code of Conduct
• Sustainable Procurement program considers current and future suppliers’ sustainability performance and risk management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (droughts, floods, wildfires, earthquakes, hurricanes)
• Impacts on Canadian residential mortgages

Transition Risks

• Changes in climate policy
• Market shifts
• Impacts on wholesale loans to metals and mining sector
• Impacts on trading and underwriting portfolio

Opportunities

• Sustainable finance
• Energy transition
• Decarbonization opportunities for clients

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 14001 (two office buildings)

Third-party Assurance: KPMG (limited assurance)

Sustainable Products & Innovation

• Transition bonds
• ESG-integrated mutual funds
• Responsible investment options

Environmental Metrics

ESG Focus Areas

• Financial inclusion
• Sustainable finance
• Operational efficiency
• Diversity, equity and inclusion
• Community impact
• Corporate governance
• Environmental and social risk management
• Data security
• Business conduct
• Human rights
• Customer experience
• Innovation and digitalization

Environmental Achievements

• 34% progress towards a 30% reduction in GHG emissions by 2030 vs. 2019 baseline
• 100% of electricity consumed from renewable sources

Social Achievements

• Increased loans to women-owned businesses in Canada to $10.3 billion
• Supported 146,242 women-owned businesses in Canada
• Increased Indigenous banking business in Canada to $11.6 billion
• Improved employee engagement index to 86%
• Reduced total turnover rate to 16.7%

Governance Achievements

• 93% of Board members are independent directors
• 54% of independent directors are women
• 77% of independent directors identified as having sustainability skills and experience

Climate Goals & Targets

Environmental Challenges

• Data limitations in measuring Scope 3 emissions and water consumption
• Increased involuntary turnover in the U.S. and Canada due to operational streamlining post-acquisition
• Third-party financial scams and fraud impacting customer experience

Mitigation Strategies

• Engaging third-party consultants for emissions assurance and data verification
• Implementing a new centralized process for promotional offer concerns in the U.S.
• Applying insights from escalated complaints to improve products and services

Supply Chain Management

Climate-Related Risks & Opportunities

Opportunities

• Climate commercialization

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Third-party Assurance: KPMG (limited assurance for selected figures), Morrison Hershfield (reasonable assurance for Scope 1 and 2 emissions and some Scope 3 emissions)