Defining the Sustainability Agenda

Dominique Barker: Welcome to The Sustainability Agenda, a podcast series focusing on the evolving complexities of the sustainability landscape with a view on addressing current issues in a concise format to help you navigate and take action. I’m your host, Dominique Barker. Please join me as we explore today’s most pressing matters with special guests that will give you some new perspective and help you make sense of what really matters. On today’s episode, I am speaking with Roman Dubczak, Managing Director and Head of Global Investment Banking at CIBC Capital Markets. We’re pleased to welcome Roman to the inaugural episode of The Sustainability Agenda. Hello, Roman, how are you?

Roman Dubczak: Great, Dominique. How are you?

Dominique Barker: Great, thank you. So today I thought we would lay the groundwork for CIBC’s direction on sustainable finance. I’ve been following and observing some of our competing banks and I really noticed that some of the financial institutions have been risk led, others have been marketing led. And I just really think it’s worth discussing CIBC’s direction. Roman, let’s start with CIBC strategy. What’s your motivation to focus on sustainability? If you can just walk us through what your thought pattern over the last two years or so?

Roman Dubczak: Well, I think, you know, as we develop our approach to the market and our clients, we really look at the macro trends that are affecting our clients because our role is primarily to be an advisor to them in accessing capital, in executing transactions for them and providing, you know, long term value creation advice as it relates to not just financing, but, you know, their profile in the market. And one of the slow burning and now fast burning trends in the market as it impacts our clients has been, broadly speaking, the sustainability agenda, some would call it ESG. But it is regarding a sustainability platform. That’s kind of the big word. And over the course of the last couple of years, we’ve ramped up our efforts to improve our insights on sustainability and the impact that would have on our clients. Really kind of in two parts. One is their cost of capital, because the further one is as it relates to a corporation away from where norms are trending on sustainability, the higher the cost of capital will be for that corporation. And then secondly, on a less quantitative basis, the social capital that a corporation develops that will influence its value and its ability to execute on its strategies. And so we kind of break it down into those two components. And we’ve built up our team as a result and we’ve ramped up our expertise on our trading desk and in our corporate lending desk as it relates to accessing green finance. You know what that means, how that’s developing and where that is all trending from a market perspective. And our clients are finding that highly valuable. Like I could say, that we went from close to zero touch points on it 18 months ago to many, many touch points on a weekly basis currently.

Dominique Barker: And have you noticed a difference in some of our relationship managers and how they’re approaching their clients?

Roman Dubczak: Yeah, well, our relationship managers, you know, by definition, are stewards of the relationship that our bank has with our clients. And, you know, they’re very close to their clients and because they’re close to their clients, the concept of, gee, what do I do about sustainability to make it very simple, has risen in prominence. And so relationship managers and our entire team has become focused on sustainability. You know, we take this approach, generally speaking, at our bank of not setting up a silo on sustainability, for example, or other aspects of trends like infrastructure and whatnot. But we use a horizontal approach where everyone is an expert in this or needs to be an expert in it. And then, of course, when it gets very complex or very nuanced, you know, we have even higher levels of expertise to bring in, for example, our sustainability advisory team, et cetera. But we take an all in approach with all our RM. So it’s not just the mining team that’s an expert in sustainability and not the others. Everybody speaks with the same level of knowledge.

Dominique Barker: I’ve been here for a year and it really feels like one of the things that differentiates us is really trying to put sustainability on everyone’s desk. And that’s, I think, a really important part of sustainability. Sustainable finance will just be called finance one day. And that was out of the expert panel on sustainable finance. So I really like that approach personally. What are some of the tangible initiatives that CIBC has taken in the past year to advance the sustainability agenda?

Roman Dubczak: Well, I think CIBC is coming in into this new era fairly well-positioned because for a long time been very thoughtful about our societal role, meaning philanthropy, the role of our team members in the Run for the Cure, Miracle Day, a variety of other impactful activities in society, we’ve been at the forefront and we feel proud of that and we have for many, many years. So that’s the S, if you will, of the ESG from a governance perspective for a very long time been leaders in terms of diversity on our board. I think we are a best in class in that category and striving to become better as it relates to diversity in our workforce. And then finally, on the environmental and climate aspect, we at the time very boldly stepped out and said over the course of a decade, from 2017 to 2027, we will finance, initiate, support one hundred and fifty billion dollars worth of renewable or sustainable energy related type of initiatives to help the world get back into balance as it relates to climate. And you know, what is going on with climate change, which we see on a daily basis. Unfortunately, once again, I don’t know who came up with the expression, if you don’t measure it, it doesn’t count. And we’re measuring it and it counts and it’s got everyone very motivated.

Dominique Barker: So pivoting to our corporate clients and following on those comments, where do you see the opportunities for growth? I mean, there are numbers being thrown around, one to three trillion dollars a year, that needs to be invested in order to transition our economy. That’s a massive opportunity for financiers or agents like ourselves, but then also for our corporate clients. Where do you see growth in the economy and what sectors of the economy do you see having those opportunities?

Roman Dubczak: It’s an exciting time to be in corporate finance. There’s a great transition going on right now, as industry and society retools to a lower carbon future, you know, transitions have in general more beneficial aspects to them than negative. But some of the negatives are the retooling of the industry and jobs moving from certain pockets of the economy to other pockets. But jobs are being created, good high paying jobs.

Dominique Barker: And lastly, we do plan to ask all of our guests on this episode. I love this question. What have you done personally in the past year to reduce your footprint or address social inequalities? And if you care to share a goal for the next 12 months, that would be great, too.

Roman Dubczak: Probably the most impactful piece of reading that I’ve done in the last couple of years was a book written by Jonathan Safran Foer, and he wrote this book called We Are The Weather. It Kind of scratched a couple of itches for me. I like the writer, and it was about climate change. And what I found fascinating was that, it’s debatable, but between 18 and 50% of the impact on climate is livestock related, the clearcutting that’s associated, the methane emissions, et cetera. And it really made me think about, whoa, it’s not just about me buying a Tesla, which is easy. It’s more of the choices you make as it relates to your consumption. So that had a profound impact on me and my family. And I think in terms of the coming 12 months, it’ll be that, Dominique. It’ll be how can an individual make an impact?

Dominique Barker: I love that answer. Thank you very much for your time today, Roman. I really appreciate it. Those are some really thoughtful comments and we look forward to digesting them. Thank you so much.

Roman Dubczak: Thanks, Dominique.

Dominique Barker: Please join us next time as we tackle some of sustainability’s biggest questions, providing different perspectives to help you move forward. I’m your host, Dominique Barker, and this is The Sustainability Agenda.

Disclaimer: The materials disclosed on this podcast are for informational purposes only and subject to our client communication policy and Code of Conduct as well as IIROC rules. CIBC Capital Markets expressly disclaims any liability to any person who purports to rely on them. The materials described herein are disclosed “as is” without warranty of any kind, either express or implied, to the fullest extent permissible pursuant to applicable law, including but not limited to the implied warranties of merchantability, operation, usefulness, completeness, accuracy, timeliness, reliability, fitness for a particular purpose or non-infringement. The information and data contained herein has been obtained or derived from sources believed to be reliable, without independent verification by CIBC Capital Markets, and we do not represent or warrant that any such information or data is accurate, adequate or complete and we assume no responsibility or liability of any nature in connection with any of the contents of this communication. This communication is tailored for a particular audience and accordingly, this message is intended for such specific audience only. Any dissemination, re-distribution or other use of this message or the market commentary contained herein by any recipient is unauthorized. This communication should not be construed as a research report. The information contained in this communication is not intended to constitute a “research report, statement or opinion of an expert” for the purposes of the securities legislation of any province or territory of Canada or “research” as defined in FINRA Rule 2241 by the Financial Industry Regulatory Authority (FINRA). The services, securities and investments discussed in this report may not be available to, nor suitable for, all investors. Nothing in this communication constitutes a recommendation, offer or solicitation to buy or sell any specific investments discussed herein. You should not construe information contained in this communication as financial, credit, legal, accounting or tax advice. The author(s) of this communication is not a person or company with actual, implied or apparent authority to act on behalf of any issuer mentioned in the communication. The commentary and opinions expressed herein are solely those of the individual author(s), except where the author expressly states them to be the opinions of CIBC World Markets Inc. The author(s) may provide short-term trading views or ideas on issuers, securities, commodities, currencies or other financial instruments but investors should not expect continuing analysis, views or discussion relating to the securities, commodities, currencies or other financial instruments discussed herein. Any information provided herein is not intended to represent an adequate basis for investors to make an informed investment decision and is subject to change without notice. CIBC Capital Markets is a trademark brand name under which Canadian Imperial Bank of Commerce (“CIBC”), its subsidiaries and affiliates (including, without limitation, CIBC World Markets Inc., CIBC World Markets Corp. and CIBC World Markets plc) provide products and services to our customers around the world. Securities and other products offered or sold by CIBC Capital Markets are subject to investment risks, including possible loss of the principal invested.  Each subsidiary or affiliate of CIBC is solely responsible for its own contractual obligations and commitments. Unless stated otherwise in writing CIBC Capital Markets products and services are not insured by the Canada Deposit Insurance Corporation, the Federal Deposit Insurance Corporation, or other similar deposit insurance and are not endorsed or guaranteed by any bank. CIBC World Markets Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. In the United States, CIBC World Markets Corp. is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Fund. In the UK, CIBC World Markets plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. CIBC World Markets Securities Ireland Limited is regulated by the Central Bank of Ireland. CIBC Australia Ltd is regulated by the Australia Securities and Investment Commission. CIBC World Markets (Japan) Inc. is a member of the Japanese Securities Dealer Association. Canadian Imperial Bank of Commerce, Hong Kong Branch, is a registered institution under the Securities and Futures Ordinance, Cap 571. Canadian Imperial Bank of Commerce, Singapore Branch, is an offshore bank licensed and regulated by the Monetary Authority of Singapore.