BMO declares climate ambition

Rhea-AI Summary

BMO has announced its ambition to be a lead partner in the transition to a net zero world, emphasizing the importance of reducing greenhouse gas emissions.

The bank plans to launch the BMO Climate Institute to provide climate analytics and insights, while committing to mobilize $300 billion in sustainable finance and $700 billion via responsible advisory services by 2025.

Additionally, BMO aims to reduce operational greenhouse gas emissions by 30% by 2030 and target net zero financed emissions by 2050.

Positive

• BMO to mobilize $300 billion in sustainable finance and $700 billion in responsible advisory services by 2025.
• Launch of the BMO Climate Institute for climate analytics and insights.
• Commitment to reduce operational greenhouse gas emissions by 30% by 2030.

Negative

• Long-term targets for financed emission reduction not yet established.
• Dependence on external partnerships for climate analytics and action.

TORONTO, March 10, 2021 /PRNewswire/ - "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.

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."

-       Darryl White, CEO

• BMO announces Net Zero ambition
• BMO to build unique climate analytics capabilities to be our clients' lead partner in the transition to a net zero world
• Introducing the BMO Climate Institute – a new multi-disciplinary organization harnessing science, analytics powered by innovative technology and industry-leading expertise
• BMO to more than double its Sustainable Finance commitment to deploying $300 billion in sustainable lending and underwriting by 2025, and mobilizing $700 billion via Responsible advisory and investment management services by 2025

Building on its long-standing commitment to a sustainable future, support for the Paris Climate Agreement, and a track record of strong operational sustainability performance, BMO today announced a new commitment to be its clients' lead partner to a net zero world, and the comprehensive steps it will take across its financing activities and operations to drive the economic transition to achieve this critical goal.

"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," said Simon Fish, Chair of the BMO Climate Institute and Special Advisor to the CEO on ESG.

Introducing the BMO Climate Institute

The BMO Climate Institute will bring 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. The Institute will drive thought leadership inside and outside of the bank, convene parties for climate action and provide insights and best practices for industry, government, academia and investors to unlock climate solutions.

Unique to the BMO Climate Institute is a new climate analytics platform built by BMO's Sustainability team and BMO Enterprise AI Labs with external partners. Leveraging geospatial data and leading scientific modelling, the platform will generate actionable insights on the impacts of climate change on physical assets.

Mobilizing Sustainable Finance

Leveraging BMO's existing capabilities in sustainable finance and insights from the BMO Climate Institute, BMO will support its clients to advance sustainability objectives, including the transition to a net zero world, by more than doubling its commitment to mobilize sustainable finance. BMO's new commitment is to deploy $300 billion in capital to clients pursuing sustainable outcomes through green, social 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

Taking Definitive Action

"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," said Michael Torrance, BMO's Chief Sustainability Officer.

BMO is taking the following steps as it launches its ambition for a net zero world:

• Setting a new target to reduce operational greenhouse gas emissions by 30% by 2030 versus a 2019 baseline using science-based approaches, building on BMO's Carbon Neutral operations (since 2010) and matching 100% of global electricity use with renewable energy purchases (since 2020)
  
  
• Targeting net zero financed emissions in our lending by 2050 and committing to establishing intermediate (2030) and longer-term (2050) targets for financed emission reduction in partnership with our clients. BMO will report on progress annually beginning in 2021
  
  
• As one of the first major banks to sign the UN Principles for Responsible Banking, BMO is committed to aligning its business strategy with the UN Sustainable Development Goals (SDGs), the Paris Climate Agreement and relevant national and regional frameworks
  
  
• As a member of the Partnership for Carbon Accounting Financials (PCAF), BMO will begin to quantify and disclose financed emissions data leveraging the PCAF approach
  
  
• BMO Global Asset Management has joined the Net Zero Asset Managers Alliance and as a member of Climate Action 100+ aligned its investee engagement program with the ambitions of the Paris Climate Agreement, including a net zero world. BMO GAM will set an interim target toward a goal of 100% net zero assets under advisement by 2050
  
  
• As a member of the Institutional Investors Group on Climate Change, BMO GAM will work with industry peers on the development of recommended actions, metrics and methodologies for asset owners and asset managers to become net zero investors
  
  
• As a member of the Equator Principles Steering Committee and Chair of the Cross-Sector Biodiversity Initiative, BMO will work with partners to develop and share good practices related to biodiversity and ecosystem services in the extractive industries

For more information on BMO's commitment to a sustainable future, please visit the bank's Sustainability Report.  For information about the BMO Climate Institute, visit our Climate page. To listen to BMO's podcasts on Sustainability go here. For more information on BMO's Purpose, please visit our Purpose page.

About BMO Financial Group 
Serving customers for 200 years and counting, BMO is a highly diversified financial services provider - the 8th largest bank, by assets, in North America. With total assets of $973 billion as of January 31, 2021, and a team of diverse and highly engaged employees, 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.

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SOURCE BMO Financial Group

FAQ

What is BMO's net zero ambition?

BMO aims to be a lead partner in the transition to a net zero world, focusing on reducing greenhouse gas emissions and sustainable finance.

What financial commitments has BMO made towards sustainability?

BMO plans to deploy $300 billion in sustainable lending and mobilize $700 billion through responsible advisory services by 2025.

What is the BMO Climate Institute?

The BMO Climate Institute is a new organization aimed at providing climate analytics and insights to guide clients in climate-related risks and opportunities.

What are BMO's operational greenhouse gas emission targets?

BMO has set a target to reduce its operational greenhouse gas emissions by 30% by 2030, using a 2019 baseline.

When does BMO plan to achieve net zero financed emissions?

BMO is targeting net zero financed emissions in its lending by 2050.