HOW WE OPERATE RESPONSIBLE BANKING WORKPLACE ENVIRONMENT COMMUNITY GOVERNANCE
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Responsible Finance and Investing WHY IT’S MATERIAL TO TD TD’s Total Lending by Sector1
Our customers are asking for greater understanding and transparency with respect to the management of environmental and social issues. Our responsibility is to demonstrate that we are managing risk and identifying opportunities across all of our businesses whether they serve corporate clients and institutional investors, retail customers or small businesses.
Management Approach – Lending
• We manage environmental and social (E&S) risk based on a life-cycle approach that begins well before our formal engagement with a client and continues throughout our relationship.
• TD’s E&S Risk Policy for Non-Retail Credit Business Lines applies to all general corporate- purpose, project and fixed-asset financing.
• Our risk management procedures are based on a progressive five-step process that includes a review of the borrower’s policy, process and performance.
• We do not finance transactions relating to development within World Heritage sites, activities that would result in the degradation of protected critical natural habitats, the mining of conflict minerals, and other prohibited transactions. Read the full list.
2015 Performance
Environmental Risk Assessment Every year we review TD’s lending portfolio to assess our exposure to environmentally sensitive industries. Approximately 5% of TD’s total lending is to industries we have indentified as environmentally sensitive based on high carbon emissions or high water use.
Go Deeper 2015 Carbon and Water Risk Assessment +
TD’s Environmental and Social Risk Process and Prohibited Transaction List
+ Page 35
71% of TD’s lending is low-risk personal and
residential lending. Sector
Personal and Residential Retail and Service
Manufacturing & Transport Commercial Real Estate Government
Natural Resources %
71% 11% 7% 5% 3% 3%
Automotive TOTAL $29 billion 1 All lending information derived from TD’s 2015 Annual Report, table 23. Figures include loans in Canada and U.S.
Environmental Enhanced Due Diligence TD’s Environmental and Social Credit Risk policy applies enhanced due diligence to deals from specific sectors including Thermal Power, Pipelines Oil and Gas, Mining and Forestry. In 2015, 198 deals were subject to sector-specific due diligence. In 2016, we will be updating our environmental and social risk assessment and our sector-specific due diligence.
Equator Principles Our 2015 reporting reflects the new requirements of Equator Principles III, applicable to project and equipment finance, project-related corporate loans and project advisory services. We have restated our 2014 figures to reflect the new requirements and guidance.
TD did not have any qualifying Equator Projects in 2015 and did not have any qualifying equipment finance, project-related corporate loans or project advisory services.
25%
Environmentally Sensitive Lending (Approximately 5% of Total Lending)
Forestry
$559 billion
Mining 5% Power & Utilities Pipelines, Oil & Gas Agriculture Food & Beverage 4% 8% 12% 17% 20% 14%
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