FinanceMap scores this financial institution in the following areas. Please navigate to the relevant tab for in-depth analysis
FinanceMap assesses these portfolios for this financial institution. Please navigate to the relevant tab for in-depth analysis.
The Bank of Montreal’s (BMO) is transparent about how the board and board committees incorporate climate-related issues into corporate strategy and its risk management processes and policies. It has assigned climate-related responsibilities to management-level positions and committees, with clear descriptions of how senior management are involved in the implementation and management of climate-related issues and strategy.
The organization considers climate-related risks and opportunities across its different business units; and has defined what it considers to be short-, medium-, and long-term time horizons, but has not disclosed which climate-related risks and opportunities it considers over which time horizons. BMO references some processes used to determine which risks and opportunities could have a material financial impact on the organization, including climate heatmaps and its Environmental and Social Risk Rating assessment templates. It also considers climate-related risks and opportunities on its lending, advisory, and investment business activities.
BMO has provided various examples of how it has considered the impact of climate-related risks and opportunities on its corporate strategy planning, including several sustainability product and service offerings across various lines of business and its $330 billion sustainable finance commitment.
It appears to have tested the resilience of its business strategy using various scenarios. In its 2022 Climate Report it disclosed analyses for various portfolios including its London metals and mining wholesale loans, residential mortgages, commercial real estate for U.S. and Canada, and a market risk scenario for trading and underwriting. Its 2023 Climate Report outlines various scenarios used, including transition scenarios from NGFS and warming pathways from the IPCC, and discloses its analysis of BMO's London branch. While BMO discloses some implications of its scenario analysis, it does not outline its capacity to adjust or adapt its strategy and business model to climate change.
BMO considers climate-related risks in assessments of credit risk, market risk, liquidity risk, and operational risk. It has clear processes for identifying and assessing climate-related risks, including a heatmap analysis to determine relative sensitivity of different sectors to physical and transition risks.
The organization outlines some processes in place to manage various climate-related risk types disclosing climate-related risks within several risk types as well as how it is managing each. BMO appears to have embedded climate-related risks into its overall risk management approach, outlining its Enterprise Risk Management Framework (ERMF), and embedding climate considerations through its E&S Risk Corporate Policy and Enterprise Risk Appetite Statement.
The organization discloses various key metrics used to measure and manage climate-related risks and opportunities, such as the proportion of assets materially exposed to physical and transition risks, the amount of financing towards managing climate related opportunities including top line sustainable financing metrics, and percentage of ESG considerations in remuneration policies.
BMO is transparent regarding Scope 1 and Scope 2 emissions, as well as some relevant Scope 3 emissions. It also discloses financed emissions for the portfolios of several sectors, including iron and steel, aluminum, cement, agriculture, oil and gas, power generation, personal motor vehicles, and residential real estate, and plans to also measure and disclose ‘facilitated emissions’ in the future using the upcoming PCAF methodology.
BMO has set a net zero by 2050 target and in October 2021, it joined the Net Zero Banking Alliance. It released its initial 2030 interim targets in its 2021 Climate Report for three sectors: upstream oil and gas, power generation, and motor vehicles. BMO has begun to assess decarbonization pathways for iron and steel, aluminum, cement, and agriculture but has not yet set targets for these sectors due to data limitations and inability to accurately track emissions.
BMO is not aligned with IPCC guidance on the role of coal in the energy mix up to 2050, and has removed its coal policy from its website since the last time it was accessed by InfluenceMap in July 2023, indicating it no longer has any restrictions on financing to coal activities or companies. Additionally, it has not outlined a coal phase out in line with IPCC guidance.
With regard to unconventional natural gas and oil, the organization states it will avoid direct financing for any project or transaction that involves exploration or development in the Arctic Wildlife Refuge. BMO does not otherwise appear to have a specific oil and gas policy, and appears to otherwise be actively financing new or expansionary projects. BMO has set a financed emissions target for the upstream oil and gas sector, committing to a 33% reduction in emissions intensity for Scopes 1 and 2, and a 24% reduction in absolute emissions for Scope 3.
BMO appears to be supportive of a future role of nuclear in the energy mix and has issued $500 million in green bonds under the world’s first nuclear financing framework. Additionally, it has communicated its support for the transition to a low-carbon economy and is increasing its financing of renewables. BMO details the eligibility of assets under its four sustainable bonds towards its sustainable finance target in its Sustainable Bond framework in 2024.
FinanceMap’s Climate Governance and Policies analysis assesses statements financial institutions (FIs) are making on how they are incorporating climate issues into their decision-making and operations using FinanceMap’s matrix methodology. This methodology is adapted from the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations and guidelines, Net-Zero Banking Alliance (NZBA) or equivalent Glasgow Financial Alliance for Net-Zero (GFANZ) initiative reporting, and IPCC and IEA technology statements. The TCFD provide guidance on 11 recommendations across four areas which are reflected in our matrix: Governance, Strategy, Risk Management, and Metrics and Targets. Additional benchmarks have been introduced to strengthen the ambition of scoring criteria in the assessment of targets, which are supplemented by guidance from the NZBA or equivalent GFANZ initiatives.
Additionally, Science-Based Policy (SBP) benchmarks are used to measure alignment of an FIs technology positions with the science of climate change. These benchmarks are applied to an FIs internal policies on technologies including coal, oil, gas, nuclear, and renewables and also assesses its engagement with broader climate and energy policy issues such as advocacy on the role and importance of different strategy types in the future energy mix.
For each TCFD recommendation and technology, FIs statements are applied to a five point scoring scale ranging from +2 to -2, measuring alignment with the relevant benchmarks. The detailed scores for this FI are displayed below within each matrix cell.
The following table outlines the key queries and data sources, which FinanceMap uses to assess financial institutions climate governance, targets and policies. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $454B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portfolio Paris Alignment analysis of this institution's activities in this portfolio area assesses deals in 2020–2024.
Value Assessed: $107B
Sector Paris Alignment scores for the sectors to which this portfolio has exposure. FinanceMap Paris Alignment analysis is limited to the automotive, upstream fossil fuel, and power sectors.
Fossil fuel companies are those whose primary sector falls within coal mining and services, or up-, mid-, and downstream oil and gas sectors. Green companies are defined as companies having over 75% revenue deriving from Substantial Contribution to Mitigation activities under the EU Taxonomy.
Portion of AUM Assessed: $55.0B
| Holding Name | Contribution to Sector Production |
|---|---|
| Emera Inc | 16.0% |
| Capital Power Corp | 10.0% |
| TransAlta Corp | 6.0% |
| Duke Energy Corp | 5.3% |
| Northland Power Inc (Ontario) | 4.7% |
| Enel SpA | 4.5% |
| Southern Co | 4.4% |
| Nextera Energy Inc | 4.2% |
| Innergex Renewable Energy Inc | 4.0% |
| Fortis Inc | 3.7% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Volkswagen AG | 26.9% |
| Toyota Motor Corp | 15.6% |
| Honda Motor Co Ltd | 7.3% |
| Stellantis NV | 7.2% |
| General Motors Co | 6.4% |
| Ford Motor Co | 5.9% |
| Suzuki Motor Corp | 4.5% |
| Nissan Motor Co Ltd | 3.6% |
| Tesla Inc | 2.8% |
| Mercedes-Benz Group AG | 2.7% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Glencore PLC | 35.4% |
| Peabody Energy Corp | 19.2% |
| Coal India Ltd | 18.7% |
| Yankuang Energy Group Co Ltd | 12.4% |
| Alamtri Resources Indonesia Tbk PT | 4.0% |
| Exxaro Resources Ltd | 3.5% |
| China Shenhua Energy Co Ltd | 2.2% |
| Alpha Metallurgical Resources Inc | 1.8% |
| Warrior Met Coal Inc | 0.9% |
| United Tractors Tbk PT | 0.7% |
| Holding Name | Contribution to Sector Production |
|---|---|
| Canadian Natural Resources Ltd | 19.1% |
| Suncor Energy Inc | 12.1% |
| Tourmaline Oil Corp | 6.2% |
| Cenovus Energy Inc | 6.1% |
| Exxon Mobil Corp | 5.2% |
| Chevron Corp | 4.6% |
| Shell PLC | 3.9% |
| TotalEnergies SE | 3.7% |
| BP PLC | 3.6% |
| Imperial Oil Ltd | 2.8% |
Bank of Montreal Global Asset Management (BMO GAM) appears to place a strong focus on climate change and ESG issues in its stewardship approach. It has outlined climate expectations for companies in line with CA100+ as well as sector specific recommendations for key industries. In 2021, it started developing an approach guided by PAII’s Net Zero Investment Framework. The asset manager has set engagement objectives to track progress against, and has outlined an escalation response which includes filing shareholder resolutions, voting against management, attending AGMs, and divestment.
BMO GAM is actively engaging with companies on climate change, including Shell and ExxonMobil and Suncor on various climate priorities such as decarbonization and net-zero strategies, energy transition impact, etc. Additionally, it has co-filed a climate lobbying resolution at ExxonMobil. BMO GAM is an active participant in climate-related investor initiatives and is a founding signatory to NZAMI, as well as a co-lead on engagements with CA100+.
BMO GAM has outlined the role of its Responsible Investment team and third party service provider in its stewardship activities. It is partially transparent about its engagements, providing some case studies in its quarterly stewardship reports and annual Responsible Investment Report. The asset manager discloses all proxy voting data along with voting rationale. It has demonstrated willingness to use shareholder authority on climate, including co-filing shareholder proposals and voting against 34 director nominees on climate grounds.
Insightia data suggests that BMO has mixed support of AGM resolutions InfluenceMap categorizes as in line with the Paris Agreement, supporting 43.9% in 2019, 56.7% in 2020, 80.5% in 2021 and showing a decrease of support in 2022 with 46%.
FinanceMap's methodology to measure the engagement process on climate was developed in consultation with several of the world's leading asset managers and uses key aspects of the UK Financial Reporting Council's 2020 Stewardship Code . The Stewardship Code was chosen to benchmark engagement quality as it provides an ambitious framework and detailed definitions of what constitutes effective engagement. FinanceMap defines the term ‘engagement’ as referring to all investor actions undertaken to influence the management strategy of the companies they own including private communications with corporate management and appointed advisors; questions at AGMs/other company meetings; comments on the company in the media; escalation and the shareholder resolution process (filing, voting behavior). FinanceMap’s methodology breaks the engagement process down into a set of sub-activities and looks for evidence associated with these across publicly available data sources.
Climate-relevance categorization of shareholder resolutions is based on the IPCC’s Special Report on 1.5°C and its concluded need for “rapid and far-reaching transitions in land, energy, industry, buildings, transport, and cities.” FinanceMap scored voting on any resolution where the intent and likely outcome is consistent with this IPCC stated need. The voting data is drawn from asset managers' disclosures to the US Security Exchange Commission (SEC), asset manager websites (including third-party websites they link to), directly from the asset managers, and through specialist voting data provider Insightia. The full list of resolutions assessed is available here.
The following table outlines the key queries and data sources, which FinanceMap uses to assess asset managers' corporate engagement programs. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
Climate Lobbying Overview: The Bank of Montreal (BMO) appears to have positive top-line messaging on climate-related policy, with little direct engagement. Its asset management subsidiary, BMO Global Asset Management (GAM) has been actively engaged in support of regulated corporate climate disclosure and certain non-financial policies including methane regulation.
Top-Line Messaging on Climate-Related Finance Policy: In its 2023 Responsible Investment Report BMO GAM stated support for limiting temperature rise to 1.5C and achieving net-zero emissions by 2050. BMO echoed this sentiment in its 2022 Climate Report. In its 2022 Responsible Investment Report BMO GAM appears supportive of climate-related financial regulation, but BMO’s position on the need for this policy is unclear in its 2023 Sustainability Report. In BMO’s Statement on Political Contributions and Lobbying, updated in 2023, it commits to engage on climate policy in a manner “consistent” with Paris Agreement goals.
Position on Regulated Corporate Climate Disclosure: BMO GAM appears supportive of regulated corporate climate disclosure. In comments to the Canadian Securities Administrators (CSA) in 2022, BMO GAM supported the proposed climate disclosure framework and advocated for increased ambition, including material Scope 3 emissions. Also in 2022 BMO GAM advocated to increase the ambition of the International Sustainability Standards Board (ISSB)’s proposed sustainability disclosure standards, suggesting a double materiality lens in place of the enterprise value approach, and to supporting mandated disclosure on governance processes and procedures, strategy and related metrics and targets. Additionally, BMO GAM supported the SEC’s proposed climate disclosure rule, including its Scope 3 disclosure requirements, in a 2022 comment letter.
Position on Taxonomies: In its 2022 Responsible Investment Report BMO GAM reports providing feedback on Canada’s proposed transition taxonomy, but gives no details of the nature of this feedback. In testimony to the Canadian House of Commons in 2024, BMO CEO Darryl White supported the need for a taxonomy, suggesting it would be useful to have a “common language” around sustainable investing.
Position on Incorporating Climate Factors into Risk Management/Prudential Regulation: In its 2023 Responsible Investment Report BMO GAM reports that it provided feedback to the Canadian Office of the Superintendent of Financial Institutions (OSFI) on proposed climate risk management guideline B-15, but details of this engagement are unclear.
Position on Real Economy Climate Policy: In BMO’s 2023 Climate Report it describes engagement on real economy climate policies, including working with the Sustainable Finance Action Council (SFAC) working group to make recommendations on carbon pricing and credits. The details of these recommendations are unclear. In 2022 BMO GAM signed a joint statement calling for an ambitious UN treaty on plastics, including upstream and downstream national policies to reduce plastic production. In 2023 comments to the EPA, BMO GAM supported the Agency’s proposed methane regulation and advocated for finalizing ambitious emission performance standards that maintain strong provisions for leak prevention and phase out of polluting controllers and pumps. According to a June 2024 Toronto lobbying disclosure, BMO is engaged in discussions with policymakers around emissions limits for existing buildings, but details of this engagement are unclear.
Position on Energy, Industry, and Land Transition: BMO has stated support for decarbonizing the economy, including in its 2023 Climate Report. In a 2024 Climate Institute blog post, BMO broadly supported specific Canadian regulations and policies to decarbonize industry including ZEV mandates, building decarbonization regulations, and low-carbon investment tax credits. Additionally, according to BMO GAM’s 2022 Responsible Investment Report, the asset manager signed a letter to support government action to prevent illegal deforestation in US supply chains.
Industry Association Governance: BMO and BMO GAM have disclosed industry association memberships but this disclosure does not include an account of industry associations' climate-related policy positions and engagement activities. BMO has therefore excluded key instances of engagement by industry associations that are active on climate-related financial policy, such as the Canadian Bankers Association, and real economy climate policy, such as the Canadian Chamber of Commerce.
InfluenceMap collects and assesses evidence of corporate climate policy engagement on a weekly basis, depending on the availability of information from each specific data source (for more information see our methodology). While this analysis flows through to the company’s scores each week, the summary above is updated periodically. This summary was last updated in Q4 2024.
InfluenceMap’s methodology for assessing lobbying on climate finance policy closely follows InfluenceMap’s established methodology on climate policy engagement, which is used extensively by investors, including via the Climate Action 100+ investor engagement process. Our full methodology can be found here.
Under our lobbying assessment, InfluenceMap considers engagement on all financial policies which intersect with climate issues, as well as “real economy” climate change policies.
The analysis takes into account both the engagement of the financial institution and the activities of industry associations they hold membership of. InfluenceMap’s methodology covers seven publicly available data sources, searching for evidence of engagement and corporate positioning since 2017. To determine the policy issues within the scope of the analysis, InfluenceMap breaks down policy engagement into a series of subcategories, or 'queries'. These are designed to cover high-level issues relating to the importance of sustainable finance, as well as more specific areas of sustainable finance policymaking. InfluenceMap’s research process searches for evidence of an organization's engagement with each policy issue, across each of the data sources.
The following table outlines the key queries and data sources, which InfluenceMap uses to assess financial institutions' policy engagement. Every evidence piece is assessed on a five-point scale of -2,-1,0,1,2 or NA (not applicable)/NS (not scored). All queries, data sources, and evidence pieces are weighted against one another in a matrix system to arrive at a final top-level score. Clicking on specific cells will load the underlying evidence and information on how it has been assessed.
In this section, we depict graphically the relationships the corporation has with trade associations, federations, advocacy groups and other third parties who may be acting on their behalf to influence climate change policy. Each of the columns above represents one relationship the corporation appears to have with such a third party.
In these columns, the top, dark section represents the strength of the relationship the corporation has with the influencer. For example if a corporation's senior executive also held a key role in the trade association, we would deem this to be a strong relationship and it would be on the far left of the chart above, with the weaker ones to the right. Click on these grey shaded upper sections for details of these relationships. The middle section contains a link to the organization score details of the influencer concerned, so you can see the details of its climate change policy influence. Click on the middle sections for for details of the trade associations. The lower section contains the organization score of that influencer, the lower the more negatively it is influencing climate policy.
