BMO Publishes an Updated Sustainable Bond Framework with Innovative Green, Social and Transition Financing Categories

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Apr 04, 2024, 09:30 ET

BMO's new Sustainable Bond Framework governs issuances of BMO Green, Social, Transition and Sustainability Bonds, and replaces its Sustainable Financing Framework
Framework's social use of proceeds criteria incorporate the BMO EMpower initiative, focused on inclusive economic growth
Framework includes market-leading use of proceeds categories including nuclear energy and climate transition financing, receiving a 'very good' sustainability quality score from Moody's in its Second Party Opinion

TORONTO, April 4, 2024 /PRNewswire/ - BMO announces changes to its Sustainable Bond Framework (formerly referred to as the "BMO Sustainable Financing Framework"), first launched in 2019, that enhance existing green and social use of proceeds criteria. Additions to the Framework include financing activities related to nuclear energy, low-carbon fuels, the electrification of key industrial activities, climate change adaptation, new categories reflecting the BMO EMpower initiative, and more.

Under the updated Sustainable Bond Framework, BMO may issue four types of sustainable bonds: Sustainability Bonds, Green Bonds, Transition Bonds and Social Bonds. The Framework, which received a Sustainability Quality Score from Moody's of SQS2 ('Very Good') in its Second Party Opinion, contains eighteen use of proceeds categories across the four types of bonds. Each type of bond's proceeds will be applied to finance or refinance, in part or in full, new or existing assets that are aligned with the four core components of the International Capital Market Association's ("ICMA") Green Bond Principles (2021), Social Bond Principles (2023) and Sustainability Bond Guidelines (2021).The Sustainable Bond Framework is also informed by the guidance from ICMA's Climate Transition Finance Handbook (2023) as it relates to practices, actions and disclosures for issuances of transition use of proceeds bonds.

Recognizing nuclear power's role in energy transition, BMO included nuclear energy as an eligible green financing activity. The criteria for nuclear energy activities include the deployment and operation of technologies that produce energy from nuclear processes; construction and operation of new nuclear power plants; and life extension and refurbishment of existing nuclear energy facilities.

"We are pleased to announce these updates to BMO's Sustainable Bond Framework including the addition of nuclear energy and transition uses of proceeds" said Sharon Haward-Laird, General Counsel, BMO Financial Group, and Chair of the BMO Climate Institute. "BMO has advised corporate and government clients on their sustainable bond frameworks and, in doing so, we recognize the importance of innovation and a practical approach to sustainability. This is reflected in our inclusion of innovative green, transition and social financing categories in our updated Framework. We remain committed to transparency and continuing to report on asset allocation and project impacts as part of our annual sustainability reporting suite."

For information about BMO's Sustainable Bond Framework, go here.

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Bank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to, statements with respect to the Bank's EMpower initiative and possible issuances of Sustainability Bonds, Green Bonds, Transition Bonds and Social Bonds and the related use of proceeds. Forward-looking statements are typically identified by words such as "may", "will" or negative or grammatical variations thereof.

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About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of January 31, 2024. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

SOURCE BMO Financial Group