BMO Publishes an Updated Sustainable Bond Framework with Innovative Green, Social and Transition Financing Categories

• BMO's new Sustainable Bond Framework governs issuances of BMO Green, Social, Transition and Sustainability Bonds, and replaces its Sustainable Financing Framework
  
  
• Framework's social use of proceeds criteria incorporate the BMO EMpower initiative, focused on inclusive economic growth
  
  
• Framework includes market-leading use of proceeds categories including nuclear energy and climate transition financing, receiving a 'very good' sustainability quality score from Moody's in its Second Party Opinion

TORONTO, April 4, 2024 /CNW/ - BMO announces changes to its Sustainable Bond Framework (formerly referred to as the "BMO Sustainable Financing Framework"), first launched in 2019, that enhance existing green and social use of proceeds criteria. Additions to the Framework include financing activities related to nuclear energy, low-carbon fuels, the electrification of key industrial activities, climate change adaptation, new categories reflecting the BMO EMpower initiative, and more.

Under the updated Sustainable Bond Framework, BMO may issue four types of sustainable bonds: Sustainability Bonds, Green Bonds, Transition Bonds and Social Bonds. The Framework, which received a Sustainability Quality Score from Moody's of SQS2 ('Very Good') in its Second Party Opinion, contains eighteen use of proceeds categories across the four types of bonds. Each type of bond's proceeds will be applied to finance or refinance, in part or in full, new or existing assets that are aligned with the four core components of the International Capital Market Association's ("ICMA") Green Bond Principles (2021), Social Bond Principles (2023) and Sustainability Bond Guidelines (2021).The Sustainable Bond Framework is also informed by the guidance from ICMA's Climate Transition Finance Handbook (2023) as it relates to practices, actions and disclosures for issuances of transition use of proceeds bonds.

Recognizing nuclear power's role in energy transition, BMO included nuclear energy as an eligible green financing activity. The criteria for nuclear energy activities include the deployment and operation of technologies that produce energy from nuclear processes; construction and operation of new nuclear power plants; and life extension and refurbishment of existing nuclear energy facilities.

"We are pleased to announce these updates to BMO's Sustainable Bond Framework including the addition of nuclear energy and transition uses of proceeds" said Sharon Haward-Laird, General Counsel, BMO Financial Group, and Chair of the BMO Climate Institute. "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. This is reflected in our inclusion of innovative green, transition and social financing categories in our updated Framework. We remain committed to transparency and continuing to report on asset allocation and project impacts as part of our annual sustainability reporting suite."

For information about BMO's Sustainable Bond Framework, go here.

Caution Regarding Forward-Looking Statements

Bank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to, statements with respect to the Bank's EMpower initiative and possible issuances of Sustainability Bonds, Green Bonds, Transition Bonds and Social Bonds and the related use of proceeds. Forward-looking statements are typically identified by words such as "may", "will" or negative or grammatical variations thereof.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements, as a number of factors – many of which are beyond our control and the effects of which can be difficult to predict – could cause actual future results, conditions, actions or events to differ materially from the expectations or intentions expressed in the forward-looking statements.

The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: our ability to successfully implement various initiatives under expected time frames, general economic and market conditions in the countries in which we operate, global capital markets activities; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational non-financial, legal and regulatory, strategic, environmental and social, and reputation risk in the Enterprise-Wide Risk Management section of the Bank's most recent Annual Report, as updated by quarterly reports, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any security or other instrument of the Bank, nor shall there be any offer, solicitation or sale of any security or other instrument of the Bank in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About BMO Financial Group

BMO Financial Group is the eighth largest bank in North America by assets, with total assets of $1.3 trillion as of January 31, 2024. Serving customers for 200 years and counting, BMO is a diverse team of highly engaged employees providing a broad range of personal and commercial banking, wealth management, global markets and investment banking products and services to 13 million customers across Canada, the United States, and in select markets globally. Driven by a single purpose, to Boldly Grow the Good in business and life, BMO is committed to driving positive change in the world, and making progress for a thriving economy, sustainable future, and inclusive society.

SOURCE BMO Financial Group

Media contact: Kelly Hechler, Toronto, [e-mail], [phone]