2016 Corporate Responsibility Report

BMO Financial Group 2016 Corporate Responsibility Report Making it personal Cynthia Mufarreh, Chief Community Reinvestment Act Officer, BMO Harris Bank Who We Are Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $692 billion as of July 31, 2016 and over 46,000 employees, BMO provides a broad range of retail banking, wealth We’re here to help our management and investment banking products and services to more than 12 million customers adapt to change. customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management To support innovators as they and BMO Capital Markets. find ways to make life better. To be a catalyst for creating economic growth, stronger communities and a healthier planet. And as we join with our stakeholders in building a sustainable future, we all share a fundamental belief: This is personal. Table of Contents A Message from the CEO 8 Our Commitment 11 Responsibility is Built Into Our Business 12 The Two Sides of Our Story 13 Corporate Governance Q&A with Barbara Muir 14 Section 1: Helping in unexpected ways 16 Section 2: Human interest 30 Section 3: Sharing one purpose 48 Reducing Our Impact 60 2016 Corporate Responsibility Report BMO Financial Group / 1 The world seems to move faster every day. And as we explore its possibilities, we’re finding new ways to connect and gaining deeper insights into what each of us values most. Change is bringing us closer together. BMO employees in class at the BMO Institute for Learning, in Toronto, Ontario. Innovation is simply the drive to improve. Great ideas come from a few people putting their minds to a challenge today so many more people will have a better tomorrow. Our job is to fuel that basic human creativity. Kendrick Smith, cosmology researcher and faculty member at Perimeter Institute for Theoretical Physics, in Waterloo, Ontario. Trust is only earned over time. And the values on which it is built must be constantly rein- forced and strengthened. This is the responsibility we all share: To give others confidence in the future. Children playing at Next Door, an early childhood education centre, in Milwaukee, WI. A Message from the CEO A Message from the Chief Executive Officer Bill Downe meeting with THE VALUE CREATED BY a bank extends far initia tive inviting grassroots ideas for revit- BMO’s Millennial Leaders beyond our array of products and services, al i zing a great city, or WINGS in Chicago Through two centuries of Advisory Council. or the technologies we use to streamline helping women escape domestic vio- driving and adapting to change, transactions, or the tools we introduce to lence and reinvent their lives – the shared make banking easy, flexible and responsive thread is listening closely to what people we’ve always understood the to changing needs. The many aspects of really need and tapping into our own ex- what we offer our customers all reflect a perience to provide meaningful support. difference between longevity fundamental understanding of why we’re Another vital dimension of help is de- in business. veloping new tools and better ways of and sustainability. Because This understanding is central to how working that fit naturally with how people we think about corporate responsibility. think and want to manage their financial corporate responsibility is We’re not just ticking boxes on a compli- lives. In the same way as the founders ance checklist; we’re finding common of H2nanO refine their solar technology something we take personally. ground with all of our stakeholders on the for cleaning contaminated water, or the kind of future we want to build together. entrepreneurs at Medella Health de- For us, this is personal. velop a smart contact lens that monitors wearers’ health, we put financial support Helping in three dimensions systems in place that are simple and intu- It begins with basic human insight. By itive, freeing these young visionaries to listening to our customers and learning concentrate on what they do best. what matters to them, we discover how we As we collaborate with all of our stake- can help them succeed. The same holds holders, we know that success ultimately true for all of our community partnerships depends on how well our own teams work – as the representative stories in this Cor- together. In helping the Piikani Nation of porate Responsibility Report illustrate. Alberta sustain its economic transform a- Whether it’s the Next Door program advan- tion, our Aboriginal Banking unit is sup- cing early childhood education in inner- ported by experts in many other areas of city Milwaukee, or the Je vois Montréal BMO, with everyone coordinating their 8 / BMO Financial Group 2016 Corporate Responsibility Report 2016 Corporate Responsibility Report BMO Financial Group / 9 A Message from the CEO Our Commitment Members of BMO’s Millennial Leaders Advisory We’re here to help. This is the promise Council at a meeting in we make to BMO’s customers. Toronto, Ontario. Our business is fundamentally about helping people achieve their goals. Everything else flows from that. Creating opportunities that didn’t exist before. Sharing energy and ideas with those who need our support. Considering the environmental impact of everything we do. Finding strength efforts as one bank. And after a massive forward,” sharing the lessons he’s learned in diversity, while feeling encouraged to wildfire forced tens of thousands of Fort with others who need a hand, captures % McMurray and area residents to flee their the spirit behind all of our efforts in pur- fulfill our potential. And doing our work 90 homes, our people right across Canada suit of social, economic and environmen- More than 90% of BMO rallied to help customers, community mem- tal sustainability. When we collaborate employees participated with integrity. Transparency. A disciplined in our Annual Employee bers and our own colleagues cope with with stakeholders, our collective impact Giving Campaign in 2015. uncertainty and, in many cases, devastat- radiates outward, with each positive approach to risk. All in the belief that ing loss. step inspiring another. Through two centuries of driving and doing the right thing is not just a matter Taking it personally adapting to change, we’ve always under- How we express our support for BMO’s stood the difference between longevity and of following the rules – it’s about earning diverse stakeholders has evolved over sustainability. We nurture our partnerships time. But as we approach the milestone of with stakeholders, supporting them with and sustaining trust. 200 years in business, our history makes empathy – and doing so responsibly. And clear that the desire to help has long de- we know that to continue deserving the fined our bank. trust they’ve invested in us, we have to en- As we balance many responsibilities, When we look back at the Bank of gage with them not merely as an institution Montreal Youth Project, launched more putting policy into action, but as people large and small, we drive BMO’s future than 40 years ago to help young people helping people. Because corporate respon- from low-income areas find employment, sibility must be taken personally. performance while furthering the we see the same values that drive our community-building efforts today. The success of all our stakeholders. story of Buddy Boyd and his journey from unemployed teenager with limited prospects to successful recycling entre- Any way we can help. preneur exemplifies our commitment to helping people realize their true poten- Bill Downe tial. And Buddy’s belief in “paying it Chief Executive Officer 10 / BMO Financial Group 2016 Corporate Responsibility Report 2016 Corporate Responsibility Report BMO Financial Group / 11 Responsibility Reporting Responsibility is Built Into Our Business The Two Sides of Our Story Our approach to corporate responsibility Each year, BMO publishes two is grounded in BMO’s defining values complementary reports focusing and integrated into our overall business on corporate responsibility. strategy. In complying with regulatory Our annual Environmental, Social and Governance (ESG) Report and requirements and adhering to an Public Accountability Statement (PAS) provides a detailed analysis of internationally recognized sustainability the bank’s performance against key sustainability indicators. This Corporate Responsibility Report shows BMO’s commitment to framework, we affirm a more fundamental sustainability in action through stories highlighting our relationships with commitment to act responsibly in all of our customers, employees, communities and other stakeholders. decision-making and weigh the potential The threads tying these two reporting vehicles together are openness, accountability and factual rigour – elements we know are essential to impact of every choice we make. maintaining trust in our bank as a responsibly managed business. Both documents reinforce the 15 material issues that have the highest priority in our decision-making and in the assessment of our stakeholders: IN THE GOVERNANCE FRAMEWORK overseen by with key stakeholders. Over the past year BMO’s Board of Directors, environmental, we’ve refined our engagement strategy, social and governance (ESG) issues fall reaching out more systematically to solicit within the mandates of the board and sev- stakeholders’ views. We also participate in eral of its committees. In addition to the many industry groups, deepening the con- Managing

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