Toronto-Dominion Bank

RATING

SECTOR

Banking

WEBSITE

CONTACT

79 Wellington St W
Toronto, ON M5J 2Z9

Tel: 1-800-430-6095
E-mail: customer.service@td.com

STOCK EXCHANGE

LISTING

EMPLOYEES

25,000

CHIEF SUSTAINABILITY OFFICER

Andrea C. Barrack

AWARDS

  • Named one of Canada’s Greenest Employers for the 12th consecutive year by Mediacorp Canada
  • Named one of Canada’s Best Employers 2020 by Forbes
  • America’s Best Employers for Women 2020 by Forbes and Statista
  • Named one of Forbes’ America’s Best Employers for Diversity for the second year in a row
  • Received a 2020 Canada’s Future Workforce Top Employers Award
  • Best Places to Work for LGBTQ Equality Award
  • Recognized by the National Organization on Disability as a 2020 Leading Disability Employer 
  • Named a 2020 WBE Canada Excellence Award
  • Winner for Most Improved Supplier Diversity Program

CONTENT SOURCE

FURTHER READING

Report created by Sonria Willis

Toronto-Dominion Bank

SECTIONS :  Sustainability •  Targets   Evaluation  •  Key Points  •  Overview

Company Activity

The Toronto-Dominion Bank is a Canadian multinational banking and financial services corporation headquartered in Toronto, Ontario. The bank was formed in 1955, through the merger of the Bank of Toronto and The Dominion Bank. It is one of two Big Five banks founded in Toronto, the other being the Canadian Imperial Bank of Commerce.

The bank and its subsidiaries have over 89,000 employees and over 26 million clients worldwide. The bank is most prominent in Canada, where it operates as TD Canada Trust and serves more than 11 million customers at over 1,091 branches. 

The Company’s segments include:

  • Canadian Retail
  • U.S. Retail
  • Wholesale Banking 

The Canadian Retail segment serves customers in the Canadian personal and commercial banking, wealth, and insurance businesses. U.S. Retail comprises the Bank’s personal and business banking operations under the brand TD Bank and wealth management in the United States. Wholesale Banking offers a range of capital markets and corporate and investment banking services.

Company Sustainability Activity

Toronto-Dominion Bank states it is committed to aligning its goals with the Paris Agreement. In its ESG report, the bank announced its ambition to target net-zero GHG emissions associated with its operations and financing activities by 2050.

In 2020, the bank joined the PCAF to support the development of carbon accounting methodologies for financial institutions. They are leveraging the PCAF methodology to inform their GHG reduction goals. TD Bank hopes to achieve this by establishing an ESG centre of Expertise, providing clients with advisory services and important transition and sustainability-focused financing through the Sustainable Finance and Corporate Transitions group within TD Securities and investing a $1.25 million five-year commitment to the ISF to support aligning mainstream financial markets with Canada’s transition to a lower-carbon economy.

Toronto-Dominion has is committed to sustainable finance and has targeted a total of $100 billion in low-carbon lending, financing, asset management and internal corporate programs by 2030, with its contribution totaling $56 billion over the last four years.

In 2019, Toronto-Dominion Bank established the Sustainable Finance Executive Council (SFEC) to develop an enterprise-wide strategy that mobilizes sustainable finance across the Bank. The SFEC works toward aligning the sustainable finance opportunities with the TD’s enterprise wide ESG strategy focused on environmental health and economic inclusion.

The bank has created a range of green banking products and services by restructuring traditional financial products to support the green transition efforts of its customers. Some of their schemes conducted in 2020 include:

  • Offering green financial programs and services across business lines such as the ECO program which offers special rates of financing for hybrid and electric vehicles. Overall, they estimate financing over 3,500 hybrid and electric vehicle transactions valued at approximately $134 million
  • Launching the TD Auto finance originating over 5,700 new electric/hybrid vehicle loans totalling US$295

The bank also conducts environmental and social due diligence to evaluate the ESG risks of potential borrowers, such procedures include:

  • Having applicable borrowers complete an E&S assessment 
  • Assess whether the borrower is engaged in any prohibited activities 
  • Embedded the Equator Principles into its E&S risk processes
  • Transactions that score high for E&S risk are escalated to TD’s Environment and Social Risk Management team

Toronto-Dominion is now a signatory to Climate Action 100+, an investor initiative that helps the world’s largest GHG emitters to take necessary steps to decrease their environmental impact. The group is part of the Responsible Investment Association (RIA) and an institutional investor signatory to the RIA’s Canadian Investor Statement on Diversity & Inclusion. 

Moreover, the bank emphasized its efforts to employe clean technology through:

  • Investments in ArcTern Ventures’ Fund II, one of Canada’s largest clean technology venture funds 
  • Support for startups through the TD Sustainable Future Lab in Waterloo
  • Established the industry-leading Patents for Startups program to help cleantech companies protect and patent their applications

Toronto-Dominion also has several LEED-certified buildings. Notably, the bank states that 52% of its core properties have ecological building certificates, up from 40% in the previous year. 

Highlights

Governance

  • Launched the new Environmental and Social (E&S) Risk Assessment and Borrower Climate
  • Change tools designed to provide a consistent and standardized approach to assessing E&S risks at the borrower and transaction level
  • TD elevated Environmental, Social and Governance priorities and governance through the creation of a Senior Executive Team Forum to provide regular oversight on ESG and climate strategy development

Environmental

Global Climate Action Plan, launched in 2020, includes the following elements:

  • Target to achieve net-zero greenhouse gas emissions associated with its operations and financing activities by 2050
  • No new project-specific financial services, including advisory services, for activities that are directly related to the exploration, development or production of oil and gas within the Arctic Circle, including the Arctic National Wildlife Refuge (ANWR)
  • A new TD Sustainable Finance and Corporate Transitions Group within TD Securities
  • A TD ESG Centre of Expertise
  • Joined the Partnership for Carbon Accounting Financials (PCAF)
  • Issued an inaugural three-year US$500 million sustainability bond; the proceeds from this issuance will be used to finance projects with environmental and/or social benefits
  • TD Asset Management launched two new ESG-oriented mutual funds
  • Contributed over $56 billion of their $100 billion low-carbon economy target 

Social

  • Provided access to relief measures for customers facing financial hardships during the COVID-19 pandemic through TD Helps in Canada and TD Cares in the U.S
  • Introduced TD Ready Advice in Canada, which is designed to help customers feel confident about their financial choices
  • Introduced the TD Community Resilience Initiative, allocating $25 million to help strengthen community resilience
  • Invested over $130 million to support non-profit organizations across their footprint through the TD Ready Commitment
  • Made a broader and longer-term commitment to increase minority executive representation across the Bank by 50% by 2025
  • Achieved its goal of having women in 40% of roles titled vice president and above in Canada office
  • Launched Indigenous Cultural Awareness Training in June 2020 and added two new training modules on Understanding Black Experiences and Anti-Black Racism
 

Targets

  • At least 30% female directors on board by 2021
  • $100 billion contribution to low-carbon lending, financing, asset management and internal corporate programs by 2030
  • 100% non-retail credit transactions reviewed by environmental and social credit risk management which includes the Equator Principles by 2021
  • Be carbon neutral by 2021
  • Zero increase in scope 1 and scope 2 GHG emissions by 2021
  • 500,000 Participants in a TD-sponsored financial education program by 2021
  • Donate a total of $1 billion by 2030
  • Reduce total volume of all types of paper used by 40% relative to 2010 baseline by 2020
  • Paper will contain a minimum of 30% post-consumer content on average
  • 100% of paper to be certified from sustainably managed forests

Progress

  • 42% female directors on board 
  • Over $56 billion contribution to low-carbon lending, financing, asset management and internal corporate programs 
  • Completed 100% non-retail credit transactions reviewed by environmental and social credit risk management which includes the Equator Principles by 2021
  • 2.3% carbon-related assets relative to total assets (0.4 percentage point decrease from 2019)
  • $13.9 billion Green, Social & Sustainability bond underwriting
  • 41% reduction in scope 1 and 2 GHG emissions relative to 2015 baseline
  • 463,700 participated in a TD-sponsored financial education program
  • Around $130 million donations in 2020 
  • Reduced total volume of paper by 59% relative to 2010 baseline 
  • Post-consumer content made up 10% of total paper usage
  • 81% of paper was sourced from sustainably managed forests

Certificates

  • LEED
  • BOMA
  • Fitwel
  • WiredScore
  • Certified B Corporations

UN Sustainable Development Goals

UN SDGs Compliance

SDG 1: No Poverty

  • Provided access to relief measures for customers facing financial hardships during the COVID-19 pandemic through TD Helps in Canada and TD Cares in the U.S

SDG 4: Quality Education

  • 463,700 participated in a TD-sponsored financial education program

SDG 5: Gender Equality

  • 42% females on board of directors; working to increase the percentage

SDG 10: Reduced Inequalities

  • Launched Indigenous Cultural Awareness Training in June 2020 and added two new training modules on Understanding Black Experiences and Anti-Black Racism
  • Made a broader and longer-term commitment to increase minority executive representation across the Bank by 50% by 2025

SDG 11: Sustainable Cities and Communities

  • Introduced the TD Community Resilience Initiative, allocating $25 million to help strengthen community resilience

SDG 12: Responsible Consumption and Production

  • $100 billion contribution to low-carbon lending, financing, asset management and internal corporate programs by 2030
  • 100% non-retail credit transactions reviewed by environmental and social credit risk management which includes the Equator Principles by 2021

SDG 13: Climate Action

  • 41% reduction in scope 1 and 2 GHG emissions relative to 2015 baseline

SDG 17: Partnerships for the Goals

  • Invested over $130 million to support non-profit organizations across their footprint through the TD Ready Commitment
  • Joined numerous international and local organizations or initiatives

Evaluation

Toronto-Dominion Bank has a significant number of awards and building certificates; and has made the listings of numerous notable listings such as the Dow Jones Sustainability Index and the CDP. The number of certificates, awards and listings earned by the bank exceeds the numbers of most other banks evaluated through the Impakter Index. 

The bank is carbon neutral and has set out clear, measurable and attainable targets; reporting progress for each of its targets. It seems to be on track to achieve most of the targets listed and has, in some cases, already met the target before the target year.

The bank has also demonstrated its commitment to help its clients transition towards more sustainable practices. It is notably involved in several green finance initiatives such as the Climate Action +100.

Despite its sustainability commitments, TD Bank has invested $121.063 B in the fossil fuel industry since the adoption of the Paris Agreement. While this contribution is significant, the bank has decreased its investments from $27.944 B in 2019 to $16.868 B in 2020.

Therefore, the company has been rated a C.

Analyst Outlook: Negative 

Toronto-Dominion Bank has been involved in two major corporate governance scandals (see further reading section). One involved a $5.5 billion dollar Ponzi scheme, from which the bank is still facing consequences to this day. The bank was also found charging excessive fees in 2018.

Key Points

  • Toronto-Dominion Bank has been involved in a $5.5 billion dollar Ponzi scheme. The bank is still facing consequences from the scandal
  • The bank was also found charging excessive fees in 2018
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