Bank of Montreal (commonly known as BMO), founded in 1817 in Montreal, Quebec, is a diversified financial services provider. With total assets of $1.02 trillion as of January 31, 2022, BMO provides a broad range of personal and commercial banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, BMO Wealth Management and BMO Capital Markets. BMO employs more than 43,863 people who serve more than 8 million customers across Canada.
In terms of its approach towards impact management, BMO acknowledges that its financing activities have both positive and negative impacts. It prioritised these impacts, has set targets for them and tracks progress against them.The financial institution assigns responsibility for sustainability issues to the board of directors and links the remuneration of its executive team to sustainability performance criteria. Furthermore itpublicly commits to gender equality and women’s empowerment,has a gender-balanced board of directors and more than 40% of senior leadership are women.BMOalso describes its engagement approach on sustainability themes and impact topics with clients and investees.It follows the leading practiceof disclosing a list of trade associations of which it is a member,both sustainability- and non-sustainability-related organisations.
As a member of the Net-Zero Banking Alliance and Net Zero Asset Managers Initiative, BMO has set a target of net-zero financed emissions by 2050. The financial institution’s subsidiary, BMO Global Asset Management discloses that alignment with the Paris Agreement is one of its engagement topics and that it requires its investees to have a strategy aligned with the Paris Agreement. The subsidiary was also a founding member of Climate Action 100+. Further, the subsidiary engages with its investees on nature- and biodiversity-related impacts and applies an escalation process to those that lack oversight mechanisms and approach to assessing and reducing their impact on water and forests. BMO discloses that it has USD 70.5 billion in green financing, including USD 9.5 billion in waste management and sustainable agriculture.
BMO has a publicly available policy statement committing it to respect human rights and the ILO core labour rights. It publicly discloses the results of its human rights risk assessments, which are aggregated across its operations and locations, provides a case study describing how it has acted on a salient human rights risk issue and discloses categories of stakeholders whose human rights have been or may be affected by its activities.The financial institution has a policy prohibiting bribery and corruption and takes steps to identify and address them.It also discloses a global tax strategy.BMO discloses the amount of finance it directs towards indigenous communities, women, black and Latino-owned business and small- and medium-sized enterprises (SMEs).
BMO has an opportunity to link the remuneration of its management team to sustainability performance criteria. While the financial institution discloses the total ratio of basic salary to men and women, it does not provide a breakdown per employee category. While the financial institution’s subsidiary, BMO Global Asset Management, describes its escalation process and the overview of its engagement activity related to asset management in a stewardship report, the groupcould provide similar information across all its financing activities.
While BMO set a 2030 emission reduction targets for specific sectors within its lending portfolio, it has an opportunity to disclose an interim absolute emission reduction target covering all its financing activities. Additionally, it could align all its green financing with internationally recognised frameworks anddisclose a time-bound target explicitly for its climate solutions. No evidence was found regarding the financial institution’s approach to fossil fuels that spans across the fossil fuel value chain, such as the amount or share of finance it directs towards fuels, or its stance on financing companies with new fossil fuel projects. Outside of engagement, there is no evidence that BMOhas made specific commitments to minimise the negative impacts it has on nature and biodiversity.
BMO has an opportunity to describe the process for identifying its human rights risks and impacts through its relevant financing activities. It also has an opportunity to disclose the proportion of its total direct operations workforce for each employee category by age group. Further, BMO could disclose the amount of finance directed towards low-income developing countries.
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Net income: CAD 7.75 billion; Total assets: CAD 988.17 billion