CIBC’s Environmental Credit Risk Management Standards and Procedures help employees involved in lending to identify environmental risks pertaining to credit evaluation and financing. The Standards require different levels of environmental due diligence depending on the level of identified risk. Lending opportunities that may pose environmental risks for CIBC are further assessed by our Environmental Risk Management (ERM) group.
The ERM group actively engages with transaction stakeholders and provides training for applicable CIBC employees as required. In addition to protecting the bank from undesired risks, our environmental review process often helps our clients better understand and effectively manage their own risks and liabilities.
CIBC conducts environmental risk assessments of our financial transactions as an integral part of our due diligence process. In 2017, CIBC’s ERM group reviewed and advised on more than 1,000 transactions worth $13.7 billion.
The Equator Principles are a voluntary financial industry benchmark for assessing and managing environmental and social risk in project financing. They have been incorporated into CIBC’s environmental due diligence requirements since 2007. The ERM group conducts regular training across the bank to ensure lending and risk adjudication groups are current with the requirements of Equator Principles.
All Equator Principles-applicable transactions are reviewed by the ERM group. In fiscal 2017, we financed six projects for which the Equator Principles were applicable and reached financial close.
As part of our environmental strategy, CIBC provides innovative financial solutions to our clients in environment-related sectors. Our Capital Markets team is at the forefront of financing new and innovative projects that contribute to cleaner, alternative or renewable energy supplies, including biogas, biomass, district energy systems, hydroelectric, solar and wind. In the last five years, CIBC lent $1.2 billion, including $380 million in 2017, towards financing renewable power projects.
Environmental, social and governance (ESG) issues can affect investment performance, and CIBC Asset Management (CAM) considers these factors as part of our regular investment research process.
CAM has a rigorous Canadian equity research process that includes an evaluation of the general environmental and social policies of a company to assess their possible impact on stock performance. We also consider the quality and governance practices of corporate boards. To support our process, CAM subscribes to and uses the research provided by Sustainalytics, an independent firm that assesses the ESG performance of global companies. Attention to these issues is central to our broader client investment objectives, not just the objectives of clients specifically interested in responsible investments.
The CAM Proxy Voting Guidelines applied to all equity accounts are consistent with the United Nations-supported Principles for Responsible Investment. We take our responsibility as shareholders seriously and many votes, including all controversial votes, are subjected to close scrutiny by the CAM equity investment team. As part of our due diligence, a company’s management team, board members and others may be consulted before a vote is cast.
CAM manages a family of equity and fixed income portfolios with specific Responsible Investment (RI) mandates. These RI portfolios do not hold securities of any company where the primary business is the sale of tobacco, alcohol or weaponry, or that has major operations in countries that disregard human rights.
CIBC’s RI holdings include mutual funds as well as institutional mandates managed on behalf of our clients. As of October 31, 2017:
- CIBC Wood Gundy held $62.2 million, and CIBC Investor Services Inc. held $22.9 million in RI retail mutual fund assets representing both Responsible Investment Association member and non-member-promoted funds;
- CIBC Asset Management had $367.9 million in RIs on behalf of clients managed on a segregated account basis; and
- Our US Region Commercial Banking and Wealth Management business held US$597.5 million.
We have a fair, transparent and disciplined sourcing and procurement process to evaluate, contract with and govern our suppliers.
Procedures are in place to assess supplier risk and to govern our contracted supplier relationships. Our Supplier Governance Program, Enterprise Supplier Governance Office and Executive-level Enterprise Sourcing Committee govern our bank’s sourcing activities across a broad range of suppliers. Each of our contracted suppliers is evaluated on comprehensive criteria, including their social and environmental initiatives.
Ethical Sourcing and Supplier Labour Practices
To ensure alignment and compliance with our standards, policies and expectations, our contracted suppliers must abide by our global Supplier Code of Conduct, commit to living up to our core values and meet the highest standards of ethical and professional behaviour.
In addition, to comply with the U.K. Modern Slavery Act, CIBC’s statement sets out the steps taken to prevent slavery and human trafficking in our business and supply chains.
Environmentally Responsible Procurement
CIBC is committed to working with suppliers who share our level of respect for the environment and who provide a safe and respectful workplace for their employees. CIBC’s Environmentally Responsible Procurement Standard describes the requirements for the procurement of goods and services that may be associated with significant adverse environmental impacts.
Alongside standard request for proposal and request for information criteria, environmental criteria are considered during the supplier selection process. CIBC continues to monitor supplier environmental performance as part of our overall supplier management process, including an ongoing requirement for suppliers to complete a questionnaire at least every two years.
Through the supplier questionnaire, CIBC gathers and reviews supplier information pertaining to: environmental management systems; environmental initiatives and performance; environmental violations; product stewardship; forestry practices; and third-party certifications.
CIBC procures paper from sources that are environmentally and socially responsible, with a preference for FSC-certified stock. In 2017 more than 98% of CIBC’s total paper consumption was FSC-certified.
When purchasing technology goods and services, CIBC incorporates environmental considerations through the use of a Technical Performance Assessment. We consider many factors including the space needed to house the equipment, service life, recyclability, and energy efficiency.