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Customers Responsible Finance


Managing Credit Risk


We manage E&S risk based on a “life-cycle” approach that begins during the due diligence process before our engagement with a client and continues throughout our relationship. Key elements of our risk management approach include:


• Engaging with multiple stakeholders to gain an understanding of key current and emerging E&S issues by sector;


• A continuous improvement approach to training our credit managers on E&S issues and policy;


• Ongoing support to the credit management team by TD Environment subject matter experts and provision of third-party research; and


• Active engagement with our clients on current and emerging issues.


Environmental and Social Risk Policy


TD’s Environmental and Social Risk (ESR) Policy for Non-Retail Credit Business Lines applies to all general corporate purpose, project finance and fixed-asset financing. Our risk review process is a progressive five-step process that includes a review of the borrowers’ policy, process and performance:


1. A high-level screen to assess for bank financing policy exclusions.


2. An environmental and social risk assessment.


3. Sector-specific due diligence for transactions undertaken in the following sectors: forestry, mining, oil sands, thermal power generation, and oil and gas pipelines.


4. An Equator Principles evaluation. 5. Final credit scoring.


+ TD’s Environmental and Social Credit Risk Process (PDF)


Headline Performance 100%


of transactions were reviewed against TD’s E&S Credit Risk Management Process.


100%


of project finance transactions were reviewed under the Equator Principles.


All credit risk managers were trained on environmental and social risk.


TD does not finance transactions relating to the following:


• Activities within World Heritage sites;


• Activities that would result in the degradation of protected critical natural habitats as designated according to World Conservation Union classification and International Finance Corporation standards;


• Activities that would involve the purchase of timber from illegal logging operations;


• Mountaintop-removal coal mining;


• Production or trade in any product or activity deemed illegal under host country laws or regulations, including:


• those ratified under international conventions and agreements;


• production or trade in wildlife or products regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES);


• deals that directly relate to the trade in or manufacturing of material for nuclear, chemical or biological weapons or for land mines or cluster bombs; or


• lending deals that are directly related to the mining of “conflict” minerals. »


Workplace


Environment


Communities


How We Operate FS3


64 FS4


TD 2013 Corporate Responsibility Report


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