VANCOUVER, British Columbia (Reuters) - Bank of Montreal (BMO.TO) ranked last among Canada’s big five banks in a report on Wednesday on what the country’s powerful lenders are doing to try to combat climate change, although the authors said all five could do more.
Royal Bank of Canada (RY.TO), Canada’s largest bank, and Toronto-Dominion Bank (TD.TO), No. 2 in size, tied for first place in the report by the Ethical Funds Co., a Vancouver-based manager of socially responsible mutual funds.
Canada’s five large banks are a major force in the country’s economy and collectively make up about one-sixth of the market value of the Toronto Stock Exchange.
“While BMO has acknowledged the science of climate change, there is little evidence that it is considering the risk from climate change in its lending portfolio,” Ethical Funds said of Canada’s fifth biggest bank.
A BMO spokesman said that although the bank agreed that there is more work to do, the conclusions of Wednesday’s report are based on published public statements and documents rather than from actual practice or internal guidelines.
“In fact, our relationship managers are experienced lenders who do take into consideration all material risk, including risk from climate change, when they assess the financing/lending requests of their clients,” BMO spokesman Ralph Marranca said in an email.
Ethical Funds said although all of the “Big Five,” which also includes Bank of Nova Scotia (BNS.TO) and Canadian Imperial Bank of Commerce (CM.TO), had acknowledged the significance of global climate change, they were moving at different rates to implement environmental policies into concrete action plans, and more needed to be done.
“The responses to climate change from our major banks are evolving rapidly but, so far, almost all action has been at the level of policy development,” said Robert Walker, vice-president of sustainability for Ethical Funds.
“While these are important first steps, many of the statements made by the banks on climate change are aspirational only and some include a disturbing amount of qualifying language,” he said in a statement.
Ethical Funds based its scorecard on 25 climate-specific indicators that ranked the banks according to issues such as carbon management and biodiversity policies, board oversight and management capacity, performance and transparency.
TD, once regarded as a laggard on environmental issues, joined Royal in first place. TD last month pledged that its domestic operations would be “carbon neutral” in 2010.
Royal “has led Canada’s banking sector on environmental issues for more than a decade and continues to do so,” Ethical Funds said.
CIBC, in third place, was “steadily increasing policy development and disclosure” while Scotiabank, ranked fourth, lagged most of its peers when it came to formalizing and disclosing lending procedures addressing climate risk.
Ethical Funds, launched in 1992, was the first socially responsible mutual fund available in Canada. It is a division of Northwest & Ethical Investments and had C$2.5 billion ($2.52 billion) of assets under management at the end of 2006, according to its Web site.
($1 = $0.99 Canadian)
Reporting by Nicole Mordant, editing by Renato Andrade