As a major global bank, Canadian Imperial Bank of Commerce (CIBC) is broadly exposed to financial stability
risks posed by climate change and has made certain climate-related commitments. Banks aligning their
activities with their climate goals are better prepared to manage risks, including the legal, reputational and
financial risks associated with climate change, and capitalize on opportunities associated with the global energy
transition.
According to the International Energy Agency, reaching net zero greenhouse gas emissions by 2050 requires
rapid transition away from fossil fuels and a tripling in global annual clean energy investment by 2030.1
The
pace at which low-carbon energy supply is scaled up will dictate the rate at which fossil fuels are phased down.2
CIBC is reportedly among the largest global financiers of fossil fuels; however, it has committed to achieve net
zero greenhouse gas emissions associated with its operational and financing activities by 2050 and $300 billion
CAD in sustainable financing by 2030.3
Although CIBC has robust disclosures on sustainable finance, investors
need additional disclosure to assess CIBC’s clean energy financing activity and relative financing of fossil fuels.
The Energy Supply Ratio (ESR), a dollar-based metric, will complement and supplement CIBC’s existing
emission-based climate financial disclosures, including any disclosures under European Union reporting
requirements, and provide decision-useful disclosure on CIBC’s activities and progress in meeting its publicly
commitments. In recent years, banks reportedly earned more in lending and underwriting fees from clean
energy projects than from oil and gas, and coal companies.4 Investors seek to assess whether CIBC is
positioning itself as a leader in the energy transition.
The ESR has become a key climate disclosure metric. Bloomberg provides clients with ESRs for global banks,
including CIBC, using a standardized methodology with clear definitions for “low carbon” and “fossil fuel”,
however it cannot include non-disclosed lending.5
Three of the largest North American banks, Royal Bank of Canada, JPMorgan and Citibank committed to
disclose ESR and their methodology, demonstrating that disclosure is feasible and leading market practice.
Investors believe that CIBC should similarly disclose its annual ESR for which it is accountable, set targets in
relation to, and work to reinforce an industry-standard approach for calculating and reporting ESR. Bloomberg
published an Implementation Guide6
and the Institute of International Finance, an industry association with
400 members globally, published a 2024 whitepaper providing a format for standardized disclosure of
methodology.7
We urge you to vote FOR the proposal.