January 24, 2024
BMO has launched a program to help Canadian clients who are commercial building owners get the financing they need to execute energy retrofits at the pace and depth required to help achieve net zero.
BMO is the first financial institution in Canada to offer a unique financial ecosystem that provides access to impact capital through the Canada Infrastructure Bank, with long term refinancing through BMO.
“Inspired by our Purpose, to Boldly Grow the Good in business and life, BMO’s Climate Ambition is to be our clients’ lead partner in the transition to a net zero world,” said Jeffrey Shell, Head of Alternatives, Commercial ESG and Innovation, BMO Global Asset Management. “Greenhouse gas emissions from Canada’s building and construction sector account for an estimated 30 per cent of Canada’s total emissions profile, and there is no route to net zero without extensive energy efficiency retrofits to existing building stock. This program is an example of the way we partner with organizations to create new and effective sustainable solutions for our clients.”
“We’re excited to be at the leading edge of sustainable finance innovation in the real estate sector,” said Nadim Hirji, Group Head, BMO Commercial Bank, North America. “As a major bank with a focus on sustainability, BMO has a role to play in supporting Canadian building owners with access to the financing they need to be part of the energy transition and we’ve already seen some promising early take up by clients.”
Recent projects include an innovative adaptive re-use project by real estate development firm Sidewalk RED in Nova Scotia.
“At Sidewalk RED, we’re working with BMO to convert a largely vacant office building into 141 units of desperately needed rental housing, while decarbonizing the building’s day-to-day operations and saving over 5,000 tonnes of embodied carbon emissions by choosing to convert an existing building, rather than build new,” said Joe Nickerson, Vice President and Partner, Sidewalk RED. “Our aim is to embed both the social and environmental dimensions of ESG into our development philosophy and do our part to build better neighbourhoods.”
How it works:
- BMO commercial bankers engage clients to explore the business case for an energy efficiency retrofit, outlining how the features of BMO’s Retrofit Program may unlock new projects.
- Client and BMO engage industry partners who scope work, forecast greenhouse gas (GHG) savings, and certify the project.
- Depending on the forecast GHG savings, the client may qualify for Canada Infrastructure Bank impact capital to support project execution.
- Post retrofit: GHG savings are verified; while the long-term refinancing structure reflects the additional value retrofitting confers on a property, in turn opening up debt restructuring options.
BMO and Sustainability
Carbon neutral in its own operations since 2010, BMO announced in March 2021 its Climate Ambition to be its clients’ lead partner in the transition to a net-zero world. This goal built on a previous commitment to mobilize $300 billion (CAD) in sustainable lending and underwriting to companies pursuing sustainable outcomes by 2025. In 2021, BMO launched the BMO Climate Institute and established a dedicated Energy Transition Group, to support clients’ pursuit of opportunities driven by the increasing momentum of the global economy’s shift in production and consumption of energy.
BMO’s sustainability leadership has been recognized on a number of rankings, including the World Benchmarking Alliance’s Financial System Benchmark, the Dow Jones Sustainability Index, Ethisphere Institute’s list of the World’s Most Ethical Companies, and Corporate Knights’ Canada’s Best 50 Corporate Citizens.
For information on BMO’s Sustainable Real Estate initiatives, click here.