Established in 1817, the Bank of Montreal (BMO) is Canada’s oldest bank and one of its largest, with eight million customers across the country. The company has three main subsidiaries: BMO Harris Bank provides commercial and retail services in the US, BMO Capital Markets provides investment management and BMO Nesbitt Burns is its investment advising firm.
While BMO boasts of its investments in renewable energy technologies, its financing of fossil fuels continues to rise. The fifth-largest financier of the oil sands, BMO is investing billions of dollars into production of one of the earth’s most climate-damaging fuel sources. As one of the most powerful and carbon-heavy banks in the country, BMO makes our list as a top enabler.
Head office: Toronto, Canada
Countries of operation: London, England; Dublin, Ireland; Lugano and Zurich, Switzerland; Munich, Germany; Hong Kong SAR; Beijing, Guangzhou and Shanghai, China; Taipei, Taiwan; Mexico City, Mexico; Bridgetown, Barbados; Rio de Janeiro, Brazil; and Melbourne, Australia13
Total assets: C$807 billion (as of January 31, 2019)14
Employees: 46,173 full-time employees
|Royal Bank of Canada||CA||7.48|
|Toronto-Dominion Bank (TD)||CA||4.96|
|Canadian Imperial Bank of Commerce (CIBC)||CA||3.11|
|Self-owned via its funds||2.71|
|Vanguard Group Inc.||US||2.37|
|Power Corporation of Canada||CA||2.23|
|Bank of Nova Scotia (Scotiabank)||CA||1.91|
|Capital Group Co. Inc.||US||1.04|
Included are all shareholdings of 1% and greater. Source: Orbis Database, October 2018.
BMO makes a moderate attempt to position itself as a climate-conscious investor, emphasizing its spending on “climate change initiatives” to the tune of C$237 million in 2016, including $170 million in net new lending commitments in the renewables sector, and $50 million in net new financings (debt and equity) in renewables.1 Meanwhile, $17.3 million was committed to its own corporate operations, including carbon neutrality costs, wind, hydroelectric facilities, and run-of-river hydro power operations.2 However significant these may be, BMO’s renewable portfolios pale in comparison to its less advertised holdings in oil and gas.
As of March 2016, BMO held C$16.3 billion in oil and gas loans (this included both drawn and undrawn commitments).3 However, these numbers exclude BMO’s fixed income financing activities—which represent a considerable amount of its influence in Canada’s oil and gas industry. These financing agreements offer targeted financial support to oil companies that is often project-specific. They are often essential in enabling companies to develop major oil and gas infrastructure such as pipelines and refineries. From 2015 to 2017 BMO’s debt and equity investments in the oil sands between totalled $US 7.7 billion—making it the fifth-largest oil sands financier.4
BMO’s investments in other forms of “extreme oil” are also notable: for example, in the same three-year period it invested US$199 million in Arctic oil sources.5 In September 2018, BMO acquired $3 billion in oil and gas loans from Deutsche Bank, proclaiming, “We are one of the leading energy investment banks in North America.”6 Beyond these lending commitments, BMO holds significant shares in large Canadian and international fossil fuel firms. The table below shows the bank’s top 15 shareholdings in fossil fuel companies, through its funds.
|VERMILION ENERGY INC.||CA||3.05|
|STORM RESOURCES LTD.||CA||2.93|
|PEMBINA PIPELINE CORP.||CA||2.74|
|TECK RESOURCES LTD.||CA||2.31|
|CRESCENT POINT ENERGY CORP.||CA||2.30|
|SDX ENERGY INC.||CA||2.29|
|CANADIAN NATURAL RESOURCES LTD.||CA||2.25|
|JUST ENERGY GROUP INC.||CA||2.13|
|ARC RESOURCES LTD.||CA||2.09|
Source: Orbis Database, February 2019.
Along with Canada’s other big banks, BMO is a signatory to the Equator Principles, a framework for determining whether potential business activities (e.g., financing) impinge on the protection of natural habitats or Indigenous rights. Yet its grade from CDP (the Carbon Disclosure Project—a global disclosure program for corporations to track and measure their environment impact)—is poor. BMO received a C in 2018. BMO also earned a D– on the 2018 Fossil Fuel Finance Report Card.7 It was listed as one of the “biggest backsliders” on extreme oil investment, having increased its financing by $778 million between 2016 and 2017.8
Climate risk and responsibility
BMO and most other major Canadian banks have been cited as laggards for failing to acknowledge climate risk.10
BMO has never publicly acknowledged climate risk to its assets. In 2016 CEO Bill Downe issued a statement rejecting the concept altogether, stating that, in reference to a recent drop in oil prices, “a market price correction does not mean that an enviable national asset has suddenly become a liability.” He went on to reassure clients that oil prices would recover and that the “economic fundamentals remain positive.”11 Downe is a former member of the US Federal Advisory Council, a collection of elite bankers that advise the Federal Reserve on monetary and financial practices.12
Learn more about the Bank of Montreal at LittleSis.org
The intent of the Corporate Mapping Project database is to engage Canadians in a conversation about the role of the fossil fuel sector in our democracy, by “mapping” how power and influence play out in the oil, gas and coal industries of BC, Alberta and Saskatchewan.