SHAREHOLDER PROPOSALS
Harrington Investments, Inc. (Harrington), 1001 2nd Street, Suite 325, NAPA, California 94559, submitted the following proposal for your vote. Harrington’s supporting comments, and the bank’s response, are set out in full below.
Proposal No. 1
Whereas, the Intergovernmental Panel on Climate Change, issued a dire warning in October 2018 that global warming emissions are accelerating, and we are in the midst of a series of escalating climate events, imperiling life on the planet;
Whereas, by late September 2020, wildfires had burned more than 6.6 million acres of the Western United States and killed dozens of people, as a direct result of climate change; and
Whereas, the Intergovernmental Panel concluded that to avoid the environmental abyss, we will have to cut the emission of global warming gasses 45% from 2010 levels in which we now have only 11 years left to make this happen;
Whereas, our bank has noted on climate that “The overall impact of a financial institution of our size can be significant. This is an important issue for BMO, especially as we consider how we can best support the transition to a lower-carbon economy while acknowledging the ongoing importance of Canada’s energy sector and supporting our clients in that sector.”
Whereas, BMO acknowledges significant fossil fuel financing in its 2019 Climate Report “Lending in support of carbon-related assets in 2019 was approximately $14.7 billion and represents 3.3% of our total lending portfolio.” However, another analysis (Banking on Climate Change: Fossil Fuels Finance Report Card 2020) identified BMO financing of fossil fuels in excess of $22 billion in 2019 and totaling over $82 billion from 2016 through 2019;
Whereas, our bank has committed to supporting renewable energy, and to purchasing carbon offsets to be carbon neutral on greenhouse gas emissions due to its infrastructure (buildings and transportation), but has not yet demonstrated an intent to neutralize the carbon footprint of its portfolio;
Whereas, according to BMO’s website: “It is the Bank’s intention to avoid direct financing for any project or transaction that involves exploration or development in the Arctic National Wildlife Reserve (ANWR).”
Resolved: Shareholders request that our Board of Directors issue a report, at reasonable expense and excluding proprietary information, describing a clear plan to make the greenhouse gas footprint of our company, including our portfolio on lending practices, carbon neutral. In doing so, it should describe the process of curtailing or transforming the bank’s financing of the fossil fuels sector.
Supporting statement
Numerous public agencies and local governments in North America have taken legislative action to restrict the extraction and transportation of fossil fuels to prevent potential catastrophic climate events and increasing danger to the health and safety of
the public. Banking on Climate Change identified our bank making fossil fuel loans to companies engaged in oil, gas and coal.
While our bank has made public comments on its website of its intention to avoid future financing in the ANWR, there is as yet nothing in our governance or “policies” to restrict lending bank capital to businesses that produce, explore for or transport fossil fuels.
BMO’s Response
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS PROPOSAL BECAUSE BMO ALREADY PROVIDES SUCH A REPORT WHICH IS ALIGNED TO FINANCIAL INDUSTRY CLIMATE CHANGE BEST PRACTICE.
The board respectfully requests shareholders to vote AGAINST this proposal because it is unnecessary given BMO’s current plans and existing disclosure, and because the proposal equates carbon neutrality to global ambitions toward a net zero world. BMO is carbon neutral across its own operations and has been since 2010. Carbon neutrality for scope 3 financed emissions is not a reasonable or appropriate objective for achievement of the Paris
Agreement goals as there would not be enough offsets in the world to effectively offset global emissions. Financing innovation and supporting clients in the transition to a lower carbon economy is the best path for climate action to achieve emissions reduction goals.
BMO is committed to adoption of leading industry practices, including as evidenced by our joining of the Partnership for Carbon Accounting Financials (PCAF), ongoing work to integrate the recommendations of the Task Force on Carbon Related Financial Disclosures (TCFD) into our disclosure and risk management
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| 88 | | Bank of Montreal Management Proxy Circular 2021 | | |
