There’s a lot more to Toronto-Dominion Bank’s commitment to being “green” than the colour of its eponymous ATMs. That’s because TD recently announced that its entire global footprint is now carbon-neutral — meaning that the bank has completely offset the impact of greenhouse-gas emissions from its worldwide operations.

The milestone exceeds TD’s April 2008 commitment to achieve carbon neutrality in its domestic operations, which include 1,100 branches and 2,600 ATMs, by adding the bank’s international locations and its U.S. banking business of more than 1,000 branches and 2,600 ATMs from Maine to Florida.

TD’s chief environment officer, Karen Clarke-Whistler, credits the efforts of employees and environmental and community groups with helping TD become the first North American bank to reach a carbon-neutral goal.

“We set out to develop an environmental leadership position among North American financial institutions,” she says. “We’re learning about environmental issues at a practical level and embedding our carbon-neutral policy into our core business strategy.”

TD has reached its goal by using three approaches: energy efficiency, renewable energy and carbon credits.

“Energy-efficiency actions account for about 10% of our carbon-emissions reductions, and our goal is to increase this percentage in the future,” says Clarke-Whistler. “We’ve retrofitted lighting, upgraded data centres, improved heating/cooling systems and introduced a new fleet policy to improve fuel efficiency. Pilot projects are also underway to assess initiatives that will further reduce our energy use, including flexible workspace scenarios, leadership in energy- and environmental design-certified building standards and rooftop renewable-energy generation on local branches.”

These measures have saved TD an estimated $2.8 million over the past 18 months, she notes.

The second leg of TD’s carbon-neutral strategy involves the purchase of renewable energy from sources such as wind and low-impact water power. Renewable energy now supplies 25% of TD’s electric power needs in Canada and 75% of its U.S. needs, says Clarke-Whistler.

“The differential reflects the fact that renewable energy credits are much cheaper in the U.S. than in Canada,” she says. “They’re priced on a provincial basis, and the prices vary widely.”

Through this process, TD is gaining valuable knowledge about how renewable-energy supply works, she adds: “This is providing us with insight into the pricing of renewables that is proving helpful as we see more renewable-energy projects looking for financing.”

TD is neutralizing its remaining emissions by generating carbon-offset credits through investments with social partners, such as Habitat for Humanity Canada, Tree Canada and Greening Canada Fund.

Last November, TD and Bank of Montreal became inaugural inves-tors in Greening Canada, an emissions reduction fund launched by Greening Greater Toronto. The fund, which is aimed at companies that are not required by regulations to reduce their carbon emissions, buys carbon-offset credits from green projects around the country and passes the credits on to the companies that invest in the fund. TD has committed $3 million over five years, while BMO has committed $10 million.

“By investing in activities and local programs to reduce carbon emissions for others,” says Clarke-Whistler, “TD is able to neutralize its remaining emissions while assisting non-profit and other organizations to develop new revenue streams and reduce their operating costs.”

At the same time, the bank is learning about the carbon-trading markets, which will be useful when emissions regulations take effect. In September 2009, the head of the U.S. Commodities Futures Trading Commission estimated that this market will grow to US$2 trillion within a few years of implementation of a cap-and-trade system.

In addition to participating in Greening Canada Fund, BMO has announced its intention to make its operations completely carbon-neutral by Oct. 31. The bank also plans to have reduced its GHG emissions by 5% over its 2007 baseline level by that date.

“It’s a multi-step process,” says Jim Johnston, director of environmental sustainability with BMO in Toronto. “As much as possible, we reduce our emissions by using less natural gas and electricity and making our equipment more efficient. We’ve done energy audits of our branches to identify the worst performers and have begun remediation efforts involving lighting retrofits, new heating, ventilating and air-conditioning systems, etc. In our big operations, this means looking at infrastructure, such as air handlers, chillers and boilers, that are major purchases.”

BMO has reduced its emissions by 8% overall by buying renewable energy, says Johnston: “160 of our 900 retail branches are fully powered by renewable energy, and we’re looking at a renewable-power proposal for our U.S. operations.”

@page_break@The balance of BMO’s emissions will be offset by carbon credits.

BMO’s carbon-neutral stance helps the bank attract and retain employees, many of whom are strongly committed to the environment, says Johnston. It is also important to customers, some of whom are green companies seeking financing and want to work with banks that share their values.

Many of BMO’s energy-saving measures can be adopted by much smaller organizations, says Johnston, adding that the process begins with employee engagement: “Look for every opportunity to reduce the use of electricity. It starts with something as simple as turning off the lights when you’re not in the room. Culture change is a vital part of the process.”

Small changes can have a significant impact, agrees Matt Cram, TD’s senior manager of communications: “It’s all about efficiency and doing things in a more sustainable way. We’ve reduced our paper usage by printing double-sided and looking for ways to go electronic. We also encourage employees not to print in colour, as ink cartridges wind up in landfill.”

Having employees onside is essential, agrees Andrea Harris, director of community leadership with Vancouver City Savings Credit Union. Vancity became the first carbon-neutral financial services institution in North America in April 2008.

“Since 1997, we’ve reduced our energy consumption in the heating, cooling and lighting of our buildings by 50% per employee,” Harris says. “And since we started reducing our energy use and emissions from our buildings, Vancity has saved $2 million in energy costs. In doing so, we’ve been able to attract new members and employees who share our values and like our conservation-minded approach.” IE