Responsible Financing and Lending

We consider the environmental risks and benefits in our lending and investing practices

In 2008, TD approved an Environmental and Social Risk Credit Management Policy for Non-Retail Business Lines that establishes common standards for identification and management of environmental and social (E&S) risk. It applies to all wholesale and business banking groups. During 2009, we developed processes and procedures to support the policy. These will be implemented in all lending groups over 2010.

Our approach focuses on consistent and proactive identification and management of environmental and social risks. It includes assessment of regulatory risks and non-regulated risk that may be material to the undertaking. Processes and procedures include:

  • A high-level screen to allow rapid identification of environmental performance based on policy, procedures and track record;
  • A risk management decision tree;
  • Social and environmental assessment procedures;
  • Equator Principle categorization; and
  • Sector-specific due diligence guidance.

TD is proactively monitoring the developing global agenda on climate change risk and regulation. We are a strong supporter of the resource-based companies that form a cornerstone of the Canadian economy. We support environmentally responsible development of Canada’s oil and gas resources as a means of bridging the growing energy supply/demand gap. At the same time, we recognize that we are living in a world that is evolving toward a more diverse energy supply base. Through research and participation in informed dialogue, we are assessing both the risks and the opportunities associated with climate change.

We have incorporated consideration of climate change and regulatory risk into our social and environmental assessment procedures. In 2009 we performed a review of the exposure of our borrowers to climate change risk. Given TD’s strong focus on retail banking, this preliminary assessment indicates that our overall exposure to sectors at high risk for greenhouse gas emissions regulations (oil and gas, power generation, mining and smelting, automotive and chemical) represents 5% of our lending portfolio (based on 2008 data).

TD does not lend money for transactions that would involve activities within World Heritage sites, would result in the degradation of protected critical natural habitats as designated according to World Conservation Union classification, or would involve purchase of timber from illegal logging operations. We do not lend money for transactions that are directly re