BMO

BMO performs well in various areas, providing substantial disclosures in areas such as governance, stewardship and financing to underrepresented groups or sectors and for climate adaptation purposes. BMO has a sustainability strategy covering its material impacts., of which the responsibility for oversight of its sustainability strategy is assigned to its highest governance body whereas implementation is done by specific functions, teams and committees. It also provides relevant incentivisation by linking the performance criteria for senior executive remuneration to sustainability targets. Stewardship wise, it has a stewardship policy that supports environmental transitions and social best practices in line with its sustainability strategy. The stewardship policy covers client and other stakeholder engagement as well as advocacy and partnerships. Additionally, BMO transparently identifies the key sectors, clients and investees to engage with on climate issues and engages in partnerships to influence and support sectors, clients and investees to act on their nature-related impacts. In terms of its financing activities, it not only discloses the amount and/or share (in monetary terms) of products, services and capital provided to women-owned businesses, but also usually excluded groups and small-medium enterprises. It provides at least one example of how its products, services and capital supports the climate adaptation and resilience of society as well.

Regarding human rights, BMO has a publicly available policy statement committing it to respect the ILO core labour rights and also publicly available policy statement expecting suppliers to respect the ILO core labour rights. BMO also discloses its approach to lobbying and political engagement in a policy, specifies that it does not make political contributions and discloses s a list of the trade associations of which it is a member. Furthermore, it discloses the positions it takes in its lobbying and political engagement activities on sustainability topics and specific actions taken to align its lobbying and public policy engagement with its sustainability strategy.

The financial institution can consider enhancing its disclosures in several areas, such as its impact materiality strategy, target and plans, organisational carbon footprint, financing for lower and low-middle income countries and climate solutions financing, risk assessment processes associated with ILO fundamental rights at work and just transition mitigation processes.

While it identifies material sustainability impacts across its value chain, it could further detail its process and how objective criteria and/or supportable evidence were considered for identification and priortization of impacts. Third-party assurance or verification of target reporting is also recommended. The financial institution can also consider disclosing that it has established a transition plan covering its own operations, supply chain and portfolio. Financing-wise, it demonstrates leading practices in its disclosures of the financing it provides to underrepresented groups and sectors and could consider doing the same in terms of its financing for lower and low-middle income countries. For instance, it could consider disclosing the breakdown of clients and/or beneficiaries by income group and its processes for avoiding divestment from low-income and lower-middle countries as unintended consequences of its sustainability strategies and targets. While the financial institution discloses the breakdown of clients and/or beneficiaries by country for some countries, it could make the list of countries comprehensive.

In relation to climate solutions financing, while the financial institution has time-bound and measurable targets for provision of products, services and capital for “green” solutions, it has an opportunity to specify the share devoted to climate solutions. Finally, it has an opportunity to disclose its risk assessment process includes risks associated with the ILO fundamental rights at work for those impacted by its provision of products, services and capital, its process for mitigating such risks when identified, as well as provide an example of the specific conclusions reached and actions taken or to be taken on at least one of its salient human rights issues of it’s the products, services and capital it offers as a result of assessment processes in at least one of its activities in the last three years.

Other areas where it has scope to improve in also include disclosures around living wages and lobbying. The financial institution could consider disclosing how it determines a living wage for the regions where it operates, as well as commit to not use its lobbying and political engagement power to impact in directions that would lead to adverse sustainability impacts, it is not making a commitment. It could also disclose that it requires third-party lobbyists to comply with its lobbying and political engagement policy too.

This scorecard refers to information in English which was publicly available by July 15 2024. AuM and Total assets are stated in USD for comparability and have been calculated based on reported local currency values multiplied by applicable IMF currency converter values.