Sustainable Finance
We are committed to increasing opportunities for clients that deliver both competitive financial returns and positive environmental and social outcomes.
CIBC Vision 2045
[00:00:04.130] – Dominique Barker
The world’s got some major challenges with regards to global emissions. We produce 50 billion metric tons of global emissions annually. 40% of that goes into sinks, forests and oceans, so green and blue and about 60% is currently emitted. And that’s what we need to get down to net zero.
[00:00:41.010] – Victor G. Dodig
CIBC’s sole purpose is to make our clients ambition to reality. We’ve been in business since 1867. We’ve transformed ourselves throughout the decades and throughout the last century and a half, and our goal is to continue to do that into the future, particularly when it comes to sustainable financing activities in a sustainable future.
[00:01:02.310] – Kikelomo Lawal
I think partnerships are crucial, number one, because no one is going to achieve these things solo. No one is going to achieve these things in isolation. It really is about sharing information. It is about evolving as data becomes more available, as information becomes more sophisticated, more advanced, we can all move forward together. CIBC is engaged in a number of partnerships. We have partnerships with the Institute for Sustainable Finance. We are part of the Sustainable Finance Action Council. We are also members of Rocky Mountain Center for Climate Alliance Finance.
[00:01:38.670] – Kikelomo Lawal
CIBC climate transition strategy involves, of course, a 2050 target for achieving net zero greenhouse gas emissions and that’s both with respect to our operational activities and our financing activities.
[00:01:56.130] – Victor G. Dodig
Banks and our clients focus on commercially viable solutions. The economics of Change the economics of sustainability need to work, and they do work when they are constructed in the right way. At the heart of change is technology and our financing of technology activities to reduce GHG emissions in the non-renewable sector as well as Project Carbon, which is a multi-bank effort to tokenize carbon credits for those clients who wish to invest using the blockchain using tokenization techniques matching suppliers of carbon credits with buyers of carbon credits.
[00:02:31.410] – Dominique Barker
CIBC is partnering with Light Source VP to help them grow their global platform. We provide financial and advisory services and, of course, insight from our own global platform, helping them achieve their own sustainability objectives by understanding them directly, understanding how the client wants to grow and how they want to achieve their own objectives.
[00:02:52.890] – Nick Boyle
I suppose in its very simplest form, our ambition is to put as much solar into the world as possible. We recently have launched an initiative to increase our aspirations to do 25 gigawatts by the end of 2025, and I think that’s born out of the fact that we have built a huge amount of momentum over the last number of years and we’re looking to fulfill the potential that that momentum allows us. Since we’ve done the deal with BP, we’ve moved from five countries to now 15 countries, and I’m not saying that we’re going to sit back in 15 countries.
[00:03:28.050] – Nick Boyle
We’re going to continue to add to the number of countries in order that we can continue to deliver more solar to our world. CIBC has been hugely supportive in us being able to deliver our sustainable journey, and I think that it is really essential that those larger banks, those larger financial institutions, take the lead in the way that CIBC and others have done. Only by doing that, can we make sure that we bring all the rest of the industry, whether that’s banking or other financial support institutions, pensions and the like along with us into this space.
[00:04:02.970] – Dominique Barker
Project carbon is a trading platform for carbon credits, and its objective is to remove friction from the voluntary carbon markets and to make it easier for everybody to transact in carbon credits, whether they be a buyer or a seller. We’re also providing price transparency, which is a key feature in the voluntary carbon markets and having price on carbon could incent additional projects, which we view is very important, and there’s some great Canadian technologies that exist right now. So, for example, carbon engineering or Savante or carbon cure or carbocrete.
[00:04:38.250] – Dominique Barker
These are all emerging technologies that are either carbon avoidance or carbon removal, which is even better, and having that robust pricing will help to finance the projects and to help grow the research and development in those areas.
[00:04:55.230] – Nick Boyle
I think the world has definitely changed. I think the business as usual as set 10 years ago, is no longer going to do it. We need to redefine what business as usual means. We need to shift from the concept of gigawatts to terawatts. We need to shift from talking in terms of millions of investment to billions of investment.
[00:05:14.430] – Dominique Barker
CIBC’s involvement with light source really demonstrates our leadership in renewable energy.
[00:05:20.190] – Victor G. Dodig
Our purpose is to make our clients ambition a reality, and we do that every day and everything we do with our team to serve of our clients. That would include sustainability understanding where our clients want to go with their businesses, and how sustainability plays a role in how we can align our own purpose with their goals.
Sustainability target
As a leader in financing renewable energy initiatives, we have increased our commitment to mobilizing sustainable finance to a target of $300 billion by 2030. The target is part of our commitment to mobilize the necessary capital and develop innovative market-based solutions to promote sustainability in alignment with broader responsible business practices across CIBC. As the landscape evolves, our goal is to continue to develop solutions that address material non-financial concerns through an integrated Capital Markets platform:
- Advisory
- Debt Capital Markets
- Equity Capital Markets
- Global Corporate Banking
- Research & Insights
Sustainability Hub
Integrated solutions
We are focused on increasing lending and capital markets activities to business leaders who recognize stakeholder capitalism through a range of green, transition and/or sustainability-linked financial products.
CIBC Capital Markets has a long history of advising clients in the energy, power and utilities sectors. Since making our initial commitment in 2018, CIBC has contributed over $40 billion toward sustainable finance activities. Renewable and emissions-free energy represented the largest market sector within that total.
Green loans are structured to meet the requirements of the Green Loan Principles set out by the Loan Markets Association and allow borrowers to finance environmentally focused corporate initiatives. Examples of eligible activities include:
- Production, transmission, and distribution of renewable energy, including storage and smart grids
- Energy efficiency projects including refurbishment of buildings, energy storage, district heating, smart grids
- Pollution prevention and control, including reduction of air emissions and greenhouse gases and waste management
- Clean transportation including electric, hybrid and public rail
- Sustainable water and wastewater management
- Green buildings which meet regional, national, or internationally recognized standards
Sustainability-linked loans are general corporate purpose loans used to incentivize borrowers’ commitment to sustainability and to support environmentally and socially sustainable economic activity and growth.
We advise on the structuring of sustainability focused bonds to enable issuers to access a wider investor base as well as link their sustainability strategy to their financing strategy. Bonds can be structured as either a specific “use of proceeds” or for general corporate purposes. Examples include:
- Green bonds
- Social bonds
- Sustainable bonds
- Transition bonds
- Sustainability-linked bonds
Our evolving sustainable investment universe
We continue to play an active role in the promotion and creation of sustainable financial products across asset classes in alignment with our clients’ interests and long-term investment goals.
- MSCI ESG index-based principal protected notes
- Commodity sales & trading of carbon credits and renewable energy credits (RECs)*
- Proprietary ESG index / quantitative investment strategies
- Interest rate & currency hedging solutions for renewables
- Deal-contingent hedges for M&A in renewable sectors
- Sovereigns, supranationals & agency investing solutions
- ESG-based ETF services
- Monetization of credits through derivatives
- Green bond distribution
- Securitization of various sustainability products
*Products pending launch.
Transition finance
Why we see responsible investing as an opportunity.
With a wide range of global sustainability challenges and complex non-financial risks on the rise, the world is in the midst of transitioning to stakeholder capitalism where sustainability is at the forefront of decision-making for corporations, asset managers and investors. We believe banks have an active role to play in the transition and, as such, are founding supporters of the Institute for Sustainable Finance’s mission of aligning mainstream financial markets with Canada’s transition to a lower carbon economy.
We are helping to create and establish guidelines on transition finance which will make a significant reduction of GHG emissions from carbon-intensive sectors. In order to achieve the goals of the Paris Climate Agreement, many industries are transitioning their activities to be net-zero by 2050. These transition finance guidelines will help investors, companies and financial intermediaries in channeling and accessing capital to achieve these goals.
We are a funding member and active participant in the development of a “Transition Finance Taxonomy” as part of a National Standard of Canada for Transition Finance being led by the Canadian Standards Association. This work was initiated based on the recommendations put forward in the Government of Canada’s Expert Panel on Sustainable Finance Final Report dated June 2019.
In addition, we are a member of the Climate Transition Finance Working Group established under the auspices of the International Capital Markets Association. The intent of this working group is to guide the market on best practices to qualify for transition finance.
Sustainability research
Institutional Equity Research
Our highly ranked research team offers select ESG considerations as part of their economic, industry and company analysis. Our reports are complemented by corporate and analyst meetings to help keep clients on top of stock market activity and the outlook for different industries and companies.
In the continued effort to augment our product offering to clients, CIBC Equity Research is now including a tear sheet highlighting select metrics for ESG (Environmental, Social and Governance), Quantitative and Technical factors within its fundamental research reports. The ESG offering includes in-house CIBC performance metrics and leverages Sustainalytics’ Risk Ratings Methodology for about 250 companies under coverage, including almost all of the S&P/TSX Composite companies.
We proudly provide our Canadian clients with access to top-ranked regional research, in combination with a robust analyst and corporate access program, and our leading equity platform for best execution. Through our UK-based research partner Peel Hunt, our clients gain valuable insight through exclusive regional expertise, local knowledge, and access to specialist events.
Products include full ESG integrated company profiles, wide ranging thematic research, bespoke work, news flow alerts, detailed regulatory commentary and daily and periodic email content.
*Access to research through our global research partner may be restricted to entitled users. CIBC clients may contact their CIBC Institutional sales representative for more information.
