BMO and EDC Announce Collaboration to Introduce Sustainable Finance Solutions for Canadian Businesses
The offering with EDC represents one of the innovative strategies that will help us meet these important goals."
- Collaboration will create solutions to help medium- and large-sized Canadian businesses in carbon-intensive sectors move to more sustainable business models
- Aligned with Canada's commitment to net zero emissions by 2050, direct, indirect and future Canadian exporters can explore affordable capital solutions to realize climate objectives and more effectively transition to net zero
TORONTO, May 2, 2022 /CNW/ - BMO Financial Group (BMO) and Export Development Canada (EDC) today announced an agreement to bring sustainable finance solutions to medium- and large-sized Canadian exporting businesses, to help them transition from carbon-intensive operations to those that can eliminate or significantly reduce emissions. As part of the agreement, BMO is the first financial institution to offer EDC's new Sustainable Financing Guarantee (the Guarantee), a product available through EDC's Sustainable Financing Program – a key source of funding to enable the support that Canadian businesses will need.
"As part of our Purpose to Boldly Grow the Good in business and life, BMO is committed to being our clients' lead partner in their transition to a net-zero world," said Jonathan Hackett, Head, Sustainable Finance and Co-Head, Energy Transition Group, BMO Financial Group. "Helping customers adapt and thrive through this transition requires a thoughtful, balanced and accelerated approach, informed by science, common sense and bold but practical solutions. The offering with EDC represents one of the innovative strategies that will help us meet these important goals."
The Guarantee is a risk-sharing solution co-developed to increase the capacity of Canadian financial institutions, like BMO, to provide companies engaged in eligible sectors with loans and financing that support their carbon reduction initiatives. The program will provide the initial
$1 billion in financing over the next three years to support sustainable initiatives, including hydrogen, renewable infrastructure and grid modernization, across nine carbon-intensive sectors. EDC will guarantee up to 50 per cent of BMO's term loan – up to a maximum of US$60 million per obligor, for a period of up to seven years – providing more capacity for BMO to support their exporting clients' low carbon transition and export growth.
"We understand the urgent need to address climate change, and as Canada's export credit agency, we have a role to play," said Justine Hendricks, Senior Vice President and Chief Corporate Sustainability Officer at EDC. "Working with Canada's financial institutions like BMO, we can support Canadian businesses' access to the financing they need to be a part of this important transition in Canada and globally. With EDC's commitment to achieve net zero by 2050, both organizations are leading the way to help businesses innovate and achieve long-term business growth in a way that is sustainable, equitable and in line with a low-carbon future.
"BMO's commitment to sustainable finance and their efforts to help Canadian companies adapt and remain competitive in the ever-changing global economy aligns with EDC's goals, making them a natural fit to launch this important initiative," said Ms. Hendricks. "Going forward, as we continue to build our sustainable financing stream, we look forward to working with other financial institutions to help Canadian businesses support the transition to net zero."
To learn more about this offering, clients should contact their BMO representative or send an email to [email protected].
BMO and Sustainability
BMO is committed to a sustainable future. Carbon neutral in its own operations since 2010, in 2021 BMO announced its Climate Ambition and its commitment to deploy $300 billion in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025. BMO is focused on being its clients' lead partner in the transition to a net-zero world and, since December 2019, has completed green and sustainability-linked loans for companies in a range of sectors, with targets including sustainability, diversity, and health and safety. To support clients' pursuit of opportunities driven by the increasing momentum of the global economy's shift in production and consumption of energy, in 2021 BMO established a dedicated Energy Transition Group and the BMO Climate Institute.
BMO's leadership on sustainability has been recognized on a number of rankings, including the Wall Street Journal's 100 Most Sustainably Managed Companies in the World, Corporate Knights' Global 100 Most Sustainable Corporations, Dow Jones Sustainability World Index, and Ethisphere Institute's list of the World's Most Ethical Companies.
For more information on BMO's commitment to a sustainable future, please visit the bank's Sustainability Report. To learn more about sustainable finance at BMO click here. For BMO's climate ambition, visit its Climate page.
EDC and Sustainability
EDC believes that sustainable practices are key the success of Canadian companies and to Canada's international competitiveness and prosperity.
The company embarked on this journey more than two decades ago when they first developed internal non-credit risk management practices. Since then, they've become one of the largest financiers of cleantech in Canada, were the first Canadian financial institution to issue a green bond and the first export credit agency to commit to net zero by 2050.
Today, they continue to make tangible progress towards their net zero goal and to act as a convener and partner of the many stakeholders who will be needed to make net zero a reality for Canada and Canadian businesses.
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 $1.02 trillion as of January 31, 2022, 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.
About EDC
Export Development Canada (EDC) is a financial Crown corporation dedicated to helping Canadian companies of all sizes succeed on the world stage. As international risk experts, we equip Canadian companies with the tools they need – the trade knowledge, financing solutions, equity, insurance, and connections – to grow their business with confidence. Underlying all our support is a commitment to sustainable and responsible business.
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