Canadian financial services provider BMO Financial Group announced today its climate ambition, establishing goals for emissions reduction in its own operations, a net zero financing pathway, and sustainable finance targets.
Introducing the new initiatives, BMO CEO Darryl White said:
“There is a pressing need for action to address climate change by reducing greenhouse gas emissions to achieve 2050 targets. Helping our customers to adapt and thrive through this transition requires a thoughtful, balanced and accelerated approach; informed by science, common sense and bold but practical solutions.
“Our clients are ready to act but many, especially smaller and medium-size companies, need advice and expertise to inform their response. Within this challenge is an opportunity for BMO to make a difference, to help our customers, and to drive long-term value and growth. Our ambition is clear: to be our clients’ lead partner in the transition to a net zero world.”
BMO’s new climate commitments include a new target to reduce operational greenhouse gas (GHG) emissions by 30% by 2030 versus a 2019 baseline using science-based approaches, and targeting net zero financed emissions in the bank’s lending by 2050, along with a pledge to set intermediate (2030) and longer-term (2050) targets for financed emission reductions. BMO has also committed to begin to quantifying and disclosing financed emissions data as a member of the Partnership for Carbon Accounting Financials (PCAF), and to work with partners to develop and share good practices related to biodiversity and ecosystem services in the extractive industries, as a member of the Equator Principles Steering Committee and as Chair of the Cross-Sector Biodiversity Initiative. On the asset management front, BMO Global Asset Management (BMO GAM) will set an interim target toward a goal of 100% net zero assets under advisement by 2050.
The company’s sustainable finance goals include a new commitment to deploy $300 billion in capital to clients pursuing sustainable outcomes through green, Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. More and sustainable lending, underwriting, advisory services, and investment by 2025, and to mobilize $700 billion in assets under advice through BMO GAM’s responsible engagement overlay (reo) service and assets under management through BMO GAM’s Responsible strategies.
Michael Torrance, BMO’s Chief Sustainability Officer, said:
“Net zero is an ambition that must include every part of the economy and society. BMO recognizes that, as a financial institution, we play a critical role to catalyze climate action, finance a just transition to a lower carbon economy, and to work with our clients to understand the risks and opportunities of this critical transformation. There is a lot of work ahead of us to achieve this goal, it will require deep insights and innovative solutions. BMO’s strategy will position us to be real partners with our clients on this journey and help them find solutions that drive their business strategies while achieving climate goals.”
The company also announced the establishment of The BMO Climate Institute, bringing together science, analytics, expertise and partners to understand and manage the financial risks and opportunities related to climate change and transition for both clients and the bank, and including a new climate analytics platform built by BMO’s Sustainability team and BMO Enterprise AI Labs with external partners to generate actionable insights on the impacts of climate change on physical assets.
Simon Fish, Chair of the BMO Climate Institute and Special Advisor to the CEO on Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More, said:
“Climate change is one of the biggest challenges we face and, to help tackle it, BMO is launching the BMO Climate Institute. The Institute will convene intellectual and technology resources to equip us with the data and insights needed to be the leading advisor to clients and partners on climate-related risks and opportunities facing the financial sector and key client industries.”
“Our optimism for the future is founded on a conviction that we will solve this problem by applying the same entrepreneurial spirit and innovation we’ve helped grow for over two centuries. The stakes are high and so is the unprecedented alignment for action we see across governments, business communities and individuals working to make change – and it’s going to take all of us working together. You can count on BMO helping to lead the way.”
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