BMO updates its framework to include nuclear energy and broader green financing categories
BMO announced enhancements to its Sustainable Bond Framework, initially launched in 2019 and previously known as the ‘BMO Sustainable Financing Framework.’
The updates include broader criteria for green and social use of proceeds, incorporating financing activities related to nuclear energy, low-carbon fuels, electrification of industrial activities, climate change adaptation, and initiatives under the BMO EMpower initiative, among others.
With the updated framework, BMO can now issue four types of sustainable bonds: Sustainability Bonds, Green Bonds, Transition Bonds, and Social Bonds.
This framework, which achieved a 'Very Good' Sustainability Quality Score (SQS2) from Moody's in its Second Party Opinion, spans eighteen categories of use across these bond types.
The proceeds from each bond type are designated for financing or refinancing, wholly or partially, new, or existing assets.
These assets must align with the core components of the International Capital Market Association's (ICMA) principles and guidelines, including the Green Bond Principles (2021), Social Bond Principles (2023), and Sustainability Bond Guidelines (2021), as well as the Climate Transition Finance Handbook (2023) by ICMA for transition bonds.
In acknowledgment of nuclear power's significance in the energy transition, BMO has classified nuclear energy as a qualified activity for green financing within the framework.
Eligible nuclear energy activities encompass the deployment and operation of nuclear energy-producing technologies, the construction and operation of new nuclear power plants, and the life extension and refurbishment of existing facilities.
Sharon Haward-Laird, general counsel at BMO Financial Group and chair of the BMO Climate Institute, expressed enthusiasm for the updated Sustainable Bond Framework.
Haward-Laird highlighted the inclusion of nuclear energy and transition-related uses of proceeds as part of BMO's commitment to innovative and practical sustainability solutions.
“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,” said Haward-Laird.
She affirmed BMO's ongoing commitment to transparency and the annual reporting of asset allocation and project impacts within their sustainability reporting suite.
