January 12, 2004

CIBC adopts banking industry "Equator Principles"

CIBC (Canadian Imperial Bank of Commerce) has formally adopted the "Equator Principles," a voluntary set of environmental and social screening criteria and guidelines designed for the international banking industry. Based on processes established by the International Finance Corporation (IFC, the private-sector investment arm of the World Bank), the Principles apply globally to development projects valued at $50 million or more (U.S.) in all industry sectors.

"We believe that the Principles will contribute significantly to ensuring social and environmental responsibility in development projects globally and we encourage their adoption by other banks as well. The Principles support CIBC's longstanding commitment to environmental responsibility in all its activities," said Wayne Fox, CIBC vice-chair and chief risk officer.

CIBC is an active participant in the United Nations Environmental Program (UNEP) Finance Initiatives North American task force supporting sustainable financial practices in North America. CIBC's commitment to corporate citizenship has been recognized by inclusion in sustainability indices such as the Dow Jones Sustainability Index.

The bank has a mature corporate environmental program and has been communicating and promoting sound environmental management practices to its client base since 1992. Two leading components of CIBC's drive toward increased transparency and accountability in its social and environmental programs are the annual release of its Public Accountability Statement (PAS) and the launch of "CIBC In Your Community," to which an environmental section was added in 2003. Both may be viewed on the company's Web site, www.cibc.com.

Last October at its annual Financial Initiatives Conference in Tokyo, Japan, UNEP singled out CIBC's 2002 PAS as "an excellent example of public disclosure." Its 2003 PAS, released last week, builds on the previous year's report, reviewing achievements in areas such as corporate governance, support for small business, community and social development, as well and environment.

"We have made considerable strides in moving closer to a 'triple bottom line' disclosure," noted Robert Waite, CIBC's senior vice-president, communications and public affairs. "We believe the 2003 PAS will take our sustainability reporting to a new level".

Environmental risk management review is a central component of the bank's corporate environmental policy, providing for environmental site assessments in credit and investment review processes across all CIBC operations. A related, reinforcing policy mandates credit and investment-related environmental due diligence and establishes guidelines for developing business-specific policies and procedures. In addition to enhancing awareness of environmental issues, these policies work to encourage sound environmental management practices within CIBC's customer base.

In 2003, the report indicates that 220 credit inquiries were ranked as high-risk and subject to further evaluation. There were 80 credits requiring subsurface investigation to determine the presence, degree and extent of contamination, and 36 credits involving sites in need of further action as a result of the bank's due diligence investigation. CIBC's environmental risk management division conducted 14 site inspections and assessments.

This division has worked through most of the 1990s to develop and refine policies and processes for assessing exposure to risk linked to lending decisions. Last year, the CIBC Environmental Risk Management Reference Guide was developed; aimed at small business and mid-market lenders, it helps them determine quickly the level of environmental due diligence required for particular credit situations.

Within the bank's own operations, CIBC has established partnerships with environmentally responsible suppliers such as Teknion (for furniture) and HOK (for interior design and architectural services), and last year purchased Evergreen Energy green power from Ontario Power Generation. In the coming year, the bank intends to purchase 2,000 megawatt-hours of green power from OPG for use in its Toronto offices. CIBC's waste reduction and recycling program collected nearly 2.9 million pounds of recyclable materials in 2003. Much of this is paper and cardboard, although in the Greater Toronto Area, other paper materials, along with compact disks and used toner cartridges are recycled.

More information is available from Rob McLeod at CIBC, 416/980-3714.

In Vancouver, Real Assets Investment Management commended CIBC as an emerging leader in reporting the impacts of social, environmental, and ethical issues on its business and how the bank is managing risks related to these issues. Last year, Real Assets led a shareholder campaign on responsible finance, calling on the five major Canadian banks to report on how social, environmental and ethical issues affect their operations and what they are doing to manage the risks. The resolution, co-filed with the banks by Ethical Funds and Meritas Mutual Funds, was withdrawn from CIBC in exchange for board-level dialogue.

"CIBC is making real progress and we look forward to further updates," said Real Assets CEO and portfolio manager Deb Abbey, co-author of The 50 Best Ethical Stocks for Canadians and author of the forthcoming book Global Profit and Global Justice: Using Your Money to Change the World.

Real Assets manages the Real Assets Social Leaders Fund and the Real Assets Social Impact Balanced Fund. The firm is co-owned VanCity Credit Union, Working Enterprises, United Capital and Renewal Partners. More information is available from Sean Kelly, 604/646-5858, E-mail seankelly@realassets.ca.

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