July 21, 2022
For TD Bank Group, a commitment to ESG has been central to its success: “Clients want to work with a bank that matches their values”
In this first of a two-part series, Edison Energy sat down with TD Bank Group, which represents the Toronto-Dominion Bank and its subsidiaries. Headquartered in Toronto, Canada, and with more than 90,000 employees around the world, TD is a top 10 North American bank that ranks among the world’s leading online financial services firms. TD is the fifth largest bank in North America by assets, with more than 26 million customers.
Part 1
A series of ‘firsts’
In 2010, TD Bank Group (TD) announced that its operations in Canada, the U.S., and international locations – its entire footprint – were carbon neutral. With that, TD became the first North American-based bank – and one of only a few banks in the world – to reach a carbon neutral goal.
Since then, TD has been a first mover when it comes to sustainability targets and actions.
TD’s public commitment to the environment began more than three decades ago with the establishment of its TD Friends of the Environment Foundation (TD FEF), a national charity that funds environmental projects across Canada. The Foundation supports a wide range of environmental initiatives, with a primary funding focus on revitalizing and stewarding public green spaces.
Since 1990, TD FEF has provided over $105,000,000 to more than 28,500 environmental projects across Canada.
“We started really early on the ‘E’ of ESG,” said Nicole Vadori, Vice President, Head of Environment, at TD. “We were early to recognize that climate change was an issue with the ability to impact our business and the communities that we support.”
Since then, it has been a series of ‘firsts’ for TD.
In 2014, TD issued a $500 million green bond–the first from a Canadian commercial bank. A year later, TD sourced renewable energy equivalent to 100 percent of the electricity used across the bank. TD joined the RE100 in 2016–the first Canadian company to become a member of the global collaborative business initiative. It was also the first to join the CDP Supply Chain Program.
TD made headlines again in 2020, when it announced its commitment to a global climate action plan. The plan includes a target to achieve net-zero greenhouse gas (GHG) emissions associated with its operations and financing activities by 2050.
“We knew we were on the right path because every time we did one of these firsts, our peers in Canada would quickly follow,” Vadori said. “We take great pride in our leadership. I think what continues to drive the momentum is that we know that climate change needs to be addressed, and we see more and more stakeholders join in the effort.”
This interest has also been reflected across investors and NGOs as well as clients, Vadori said.
“Our clients are taking action–they increasingly want to work with a bank that matches their values,” she said. “As far as employees–retention is a big concern right now. Companies that are able to live their values and make an impact–those are the places that employees want to work. The commitment to ESG from the top levels at TD is unique and it’s been central to our success. I think early on we realized there are non-financial factors that pose financial risks to the bank and that, if we want to be successful, we need to address these issues and effect positive change.”
Corporate transitions
Two years ago, TD Securities – the wholesale arm of TD – created its Sustainable Finance & Corporate Transitions group –now called ESG Solutions – to help clients align their financing strategies with their sustainability goals.
The group provides clients with the full suite of ESG services including creation of frameworks for green, social, and sustainability-linked products; advisory on best practices and market standards for ESG integration in corporate strategy and reporting; and provision of ESG due diligence for mergers and private equity transactions.
Practically, this means that TD helps clients prioritize their reporting platforms, decode ESG ratings, conduct peer ESG benchmarking exercises, and track relevant industry sustainability standards.
In June 2021, TD announced that it had been chosen as one of two structuring advisors for the Government of Canada’s inaugural green bond framework and more recently announced that it was chosen as a Joint Lead Manager on the associated $5 billion green bond issuance.
The green bond provides financing towards projects ranging from green infrastructure to nature conservancy and helps investors seeking green investment opportunities.
“TD was incredibly proud to work with the Government of Canada on this initiative,” said Susan Thompson, a Director on the TD Securities Sustainable Finance & Corporate Transitions team. “Canada recognizes that mobilizing capital plays an important role in achieving its 2030 reduction targets, as well as its 2050 net-zero emissions target. Green bond issuance is a way for Canada to mobilize this capital in support of its targets and its broader action plan. It also supports the growth of the sustainable financing market in Canada and globally which, as we have seen, is growing at a phenomenal pace.”
The bond saw robust demand, particularly from socially and environmentally responsible investors.
“There was a lot of demand for this $5 billion green bond,” said Sophie Dejonckheere, a Director on the TD Securities Sustainable Finance & Corporate Transitions team. “The order book was $11 billion, a record high for a Canadian dollar green bond offering. We also had a lot of international interest – just over 45 percent of the investor base.”
