55 Emerging risks

TD tracks our exposure to non-regulated environmental risks and related social risks based on sector norms for intensity of use of natural resources and/or by the potential impact on natural resources. We review our entire loan portfolio on an annual basis for:

• Carbon risk – based on carbon emissions; and • Water risk – based on volume of water usage.

For risk-management purposes we categorize environmental risk by sector. The level of environmental sensitivity directly influences the level of scrutiny that a financial undertaking receives.

Sector Environmental Sensitivity Low

1

Residential and personal, residential real estate, financial, government and public sector, professional and other services, health and social services, media and entertain- ment, retail, telecommunications.

Moderate High Carbon Risk

We define carbon risk based on the emissions of greenhouse gases. We track our exposure to carbon risk by sector. Sectors that TD rates as high for carbon risk include automotive, chemical, pipelines, oil and gas, power and utilities. Sectors that TD rates as moderate for carbon risk include non-residential real estate, agriculture, construction, food and beverage, forestry, manufacturing, metals and mining, and transportation.

• TD supports energy diversity, and we continue to actively participate in clean technology financing, including renewable energy.

• In 2012, the value of our financing for renewable energy stood at $2.6 billion.

1 As of October 31, 2012.

Non-residential real estate, agriculture, food and beverage, industrial construction, automotive, manufacturing, transportation.

Chemical, forestry, mining, pipelines, oil and gas, power and utilities.

Be an Environmental Leader

• TD was recognized in the Bloomberg Clean Energy Finance League Tables. We placed second in the Public Market/Lead Manager Category, with $345.5 million in credit from management of a secondary share placement for a run-of-river hydroelectric development.

Portfolio Exposure to Carbon Risk1 (Canada and U.S.)

High Risk 2.1% Medium Risk 10.1% Low Risk 87.9%

As of October 31, 2012. Water Risk

We define water risk based on the potential economic and environmental impact of changing patterns of precipitation and of exposure to flooding, drought or extreme storm events caused by climate change. We track our exposure to sectors that are water-sensitive.

Sectors that TD rates as high for water sensitivity include agriculture, food and beverage, forestry, metals and mining, pipelines, oil and gas, power and utilities. Sectors that TD rates as moderate for water sensitivity include automotive, chemical, industrial construction, manufacturing, non-residential real estate and transportation.

Portfolio Exposure to Water Risk1 (Canada and U.S.)

High Risk 3.4% Medium Risk 7.8% Low Risk 88.8%

TD 2012 Corporate Responsibility Report