Customers 2013 Performance
• All credit risk managers were trained on environmental and social risk.
• 286 corporate lending transactions were reviewed under the ESR process.
• Of these transactions, 88% were subject to sector-specific due diligence involving a review of environmental policies, processes and performance.
• As a result of TD’s proactive approach to managing E&S risk, transactions that are not expected to meet TD’s stringent risk requirements are not advanced for financing consideration. For this reason, we have not declined a deal under the Environmental and Social Credit Risk Management Process during the last three years.
Lending Transactions Reviewed by Sector (%)
Workplace Equator Principles (EP)
TD has been a signatory to the Equator Principles since 2007. We participate in a number of Equator Principles Financial Institutions (EPFI) working groups. In 2013, TD contributed by:
• Participating in the revisions to EPIII that were launched in June 2013; and
• Leading a working group to develop a long-term strategic direction for the EP.
The revised EPIII include the following enhancements:
• A broader scope of application to cover project-related corporate loans;
• Additional reporting requirements;
• Project reporting requirements on greenhouse gas emission levels for projects emitting more than 100,000 tonnes of CO2
e; and
• The inclusion of the Designated Countries list, which is similar to the current High-Income OECD Country list.
+ More details on Equator Principles (PDF)
Oil and gas extraction Power and utilities Mining
Oil and gas pipeline Forestry Other
37 25 11 8 7
12
+ Detailed Environmental Performance (PDF)
Issue in Focus: Environmental and Social Due Diligence
TD’s business strategy is built on developing long-term relationships with our clients. Within TD Securities, our focus is on general corporate purpose lending – not project-specific lending. Consequently we undertake a high level of due diligence before engaging with a client. We need to fully understand a company’s policies, performance, management processes and controls to ensure they are within TD’s risk appetite, including our environmental policy and standards. If we find that this is not the case, we do not engage with the client. It also means that if our due diligence processes are properly applied, we are seldom put in a position of having to turn down a financing request with an existing client.
As our lending and credit operations are relationship-based, we expect to have ongoing client engagement. This is equally true for environmental and related social issues as for any other aspect of the business. TD seeks to advise and support our clients on emerging environmental trends, and identify opportunities to engage in multi-stakeholder forums aimed at advancing dialogue on key issues. Should a concern be identified, we work with clients to gain assurances that the appropriate management or mitigation measures have been put in place.
2013 Project Finance Transactions Assessed Under the Equator Principles Sector Mining
Oil and gas Utilities
Real estate Pipeline transport
Country Canada Canada
United States Canada Canada
EP Category C C C C C
Total
Number of Transactions 1 1 1 5 1 9
Environment
Communities
How We Operate
65 EN26
TD 2013 Corporate Responsibility Report
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