WHEN YOUR INVESTMENT BOMBS

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WHEN YOUR INVESTMENT BOMBS…

A Summary of Canadian Financial Institutions’ Investments in Cluster Munitions

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Last updated on January 30, 2010

www.minesactioncanada.org

2 GLOSSARY

CCM Convention on Cluster Munitions

CMC Cluster Munition Coalition

CSR Corporate Social Responsibility

ESG Environment, social and governance

FI Financial Institution

MAC Mines Action Canada

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3 WHEN YOUR INVESTMENT BOMBS…

SUMMARY, BACKGROUND & OUR RESEARCH REPORT 4

SUMMARY OF CANADIAN FI INVESTMENT INVOLVEMENT 9

CANADIAN FINANCIAL INSTITUTIONS & INDIVIDUAL RECOMMENDATIONS 10

1.1 Currently Implicated Banks 10

1.1.1 Caisse de Depot et Placement du Québec 10

1.1.2 Canadian Imperial Bank of Commerce (CIBC) 11

1.1.3 Canada Pension Plan Investment Board (CPPIB) 13

1.1.4 CI Financial Corporation 14

1.1.5 Scotiabank (Bank of Nova Scotia) 15

1.2 Previously Implicated Banks 18

1.2.1 Bank of Montreal (BMO) 18

1.2.2 Royal Bank of Canada (RBC) 19

1.2.3 Toronto Dominion Bank (TD) 21

1.3 Other Domestic Banks/Subsidiaries 23

1.3.1 Bank West (owned by 1.3.19 Western Financial Group) 23

1.3.2 Bridgewater Bank 24

1.3.3 Canadian Tire Bank 24

1.3.4 Canadian Western Bank 25

1.3.5 Citizens Bank of Canada 26

1.3.6 CS Alterna Bank 28

1.3.7 DirectCash Bank 29

1.3.8 Dundee Bank of Canada 30

1.3.9 First Nations Bank of Canada 30

1.3.10 General Bank of Canada 31

1.3.11 HomEquity Bank 32

1.3.12 Jameson Bank 33

1.3.13 Laurentian Bank of Canada 34

1.3.14 Manulife Bank of Canada 34

1.3.15 National Bank of Canada 35

1.3.16 Pacific & Western Bank of Canada 36

1.3.17 President's Choice Bank 37

1.3.18 Vancouver Savings Credit Union (owner of 1.3.5 Citizens Bank of Canada) 38

1.3.19 Western Financial Group (owner of 1.3.1 Bank West) 39

CONCLUSION AND GENERAL RECOMMENDATIONS 41

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Summary, background & our research report

What are cluster bombs and what is the problem?

Cluster bombs (also called cluster munitions) include cargo containers and submunitions (or bomblets). When fired, launched or dropped from the air or fired from the ground, the containers open and disperse hundreds or even thousands of bomblets over a large area which results in dense contamination. These bomblets can pierce armour and kill anyone within a range of 50 metres with its explosive lethal charge.

The bomblets can spread over an area as wide as several football fields and cannot distinguish between military or civilian targets. They also have a failure rate that ranges from 5-30% which means that those that do not explode (‘duds’) become explosive remnants of war and pose a continuing and fatal risk to surrounding communities.1

The Convention on Cluster Munitions (CCM) is a legally binding international treaty that forbids the use, production, stockpiling and transfer of cluster bombs. The CCM is the result of the Oslo Process which began in February 2007 following the failure of government talks within the traditional forum for discussing weapons-related issues. Subsequent meetings were held and the CCM was finally negotiated and wording was adopted on May 30, 2008 at the Dublin Diplomatic Conference2. To enter into force, 30 countries must ratify it (they must pass national legislation to criminalize the use, production, stockpiling or transfer of cluster bombs by its citizens and deposit its laws with the United Nations). As of January 2010, 104 countries have signed the treaty (including Canada), and 26 countries have ratified the treaty: 4 more are needed for the CCM to enter into international force3.

For more information on cluster bombs and their impact, see our website:

http://www.minesactioncanada.org/index.cfm?fuse=learn.issues-cluster-bombs

What is MAC doing to ensure your investment doesn’t bomb?

Mines Action Canada is running a national disinvestment campaign with the goals of:

• Having all Canadian banks clarify their positions on providing financing (director or indirect) to cluster munition producers

• Educating the financial community on the impacts of victim-activated weapons and the need to ban their production

• Researching and verifying involvement of Canadian financial institutions in funding cluster munition producers

• Producing a report on the state of Canadian investment in cluster munition producers

• Advocating for the strongest possible interpretation of banning “assistance” in the production of cluster bombs as included in Article 1 c) of the Cluster Munition Convention.

1

Mines Action Canada, ‘Learn-Cluster Bombs’, Ottawa, 2010,

http://www.minesactioncanada.org/index.cfm?fuse=learn.issues-cluster-bombs 2

Cluster Munition Coalition, ‘The Solution’, London, 2010, http://www.stopclustermunitions.org/the-solution/ 3

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5 Key Messages4

• Although 98% of cluster bomb victims are civilians, cluster bomb producers do not have any problems attracting capital from financial markets. Canadian financial institutions have been implicated in providing funds to companies that produce cluster bombs.

• The Ottawa Treaty banning landmines and the Convention on Cluster Munitions state

“each State Party undertakes never under any circumstance to assist, encourage or induce, in any way anyone to engage in any activity prohibited to a State Party under this Convention.” Financing the production of antipersonnel mines or cluster bombs or

their components should clearly constitute “assistance” or encouragement, but in reality the implementation of these treaties does not automatically lead to banning these types of investments.

• MAC is working towards a Canadian ban on direct and indirect investments by researching the involvement and clarifying policies of Canadian financial institutions; encouraging Canadians to question how their money is being used; and advocating for Canadian legislation that would ban such investments.

• MAC is calling on financial institutions to be transparent regarding their policies of investing in companies producing cluster bombs and their components. To facilitate this, MAC is also asking the public to proactively ask their financial institutions for these policies and changes to be made to these policies to more explicitly ban these types of investments, if needed.

Campaign Background5

When your investment bombs is the Canadian component of the international Explosive Investments disinvestment campaign coordinated by the Cluster Munition Coalition. This

campaign is a global movement to raise awareness and push for action to deny funds to cluster munition producers as the CCM becomes international law in 2010. The financing of cluster munitions producers gives legitimacy to these companies and their production of these weapons and should be considered illegal.

The Reports

A February 2007 report by Netwerk Vlaanderen, a Belgian organization that promotes a socially responsible approach to money, focused on six cluster munition producers and found that 68 financial institutions played a role in financing these companies.6 During this reporting period, four Canadian banks were identified as investing in cluster munition producers: Bank of Nova Scotia (Scotiabank), Bank of Montreal, Royal Bank of Canada and Toronto Dominion.

See the report here: http://www.netwerkvlaanderen.be/nl/files/documenten/publicaties/mini-dossiers/net-vl.briefingpaper0207.pdf

In October 2009 Netwerk Vlaanderen (Belgium) and IKV Pax Christi (Netherlands) released a report entitled “Worldwide Investments in Cluster Munitions: A shared responsibility”. This publication reports on financial institutions’ investment in companies that are involved in the

4

Mines Action Canada, ‘Key Messages’, Ottawa, 2010, http://www.minesactioncanada.org/index.cfm?fuse=our-campaigns.2010-01#key-messages

5

Mines Action Canada, ‘Background’, Ottawa, 2010 http://www.minesactioncanada.org/index.cfm?fuse=our-campaigns.2010-01#background

6

Netwerk Vlaanderen, “Explosive Investments: Financial Institutions and Cluster Munitions”, Brussels, February 2007,

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6 manufacturing of cluster munitions, financial institutions that are disinvesting in such

companies and best practice legislation that prohibits the investments in cluster munitions.7 During this reporting period, five Canadian financial institutions were identified as investing in cluster munition producers (see next section).

See the report here: http://www.stopexplosiveinvestments.org/uploads/pdf/worldwide-investments-in-clustermunitions-a-shared-responsibility.pdf

The Netwerk Vlaanderen and IKV Pax Christi report has placed eight companies on a Red Flag List of Cluster Munitions Producers including:

Alliant Techsystems (United States), Hanwha (South Korea), L-3 Communications (United States), Lockheed Martin (United States), Poongsan (South Korea), Roketsan (Turkey), Singapore Technologies Engineering (Singapore), Textron (United States)8.

Canadian Financial Institutions

A variety of financial institutions (FIs) operate in Canada including banks, insurance companies, investment funds and banks, pension funds, multilateral financial institutions and government funds. These FIs play a key role in financing international companies that require their resources to operate. Since they are profit-driven, the majority of these institutions make investment decisions based on profit maximizing criteria and frequently invest in companies and projects that do not take into account human rights, armed conflict or environmental destruction. Client’s money (yours and mine) is used to make these investments and if our financial

institution does not have a comprehensive responsible investment policy regarding weapons and cluster bombs, our money could be used to invest in the production of cluster bombs. The Netwerk Vlaanderen and IKV Pax Christi report has identified six Canadian financial institutions as investing in one or more of the eight companies on the Red Flag list. These are: BMO Financial Group, Caisse de Depot et Placement du Québec, Canada Pension Plan Investment Board (CCPIB), Canadian Imperial Bank of Commerce (CIBC), CI Financial Corporation and Scotiabank (Bank of Nova Scotia). These financial institutions are implicated in financing cluster munition producers through their participation in international financing syndicates, including ownership or management of bonds and shares and/or provision of loan facility. As such, they are providing indirect assistance to the manufacturers of cluster bombs that cause unacceptable harm to civilians.

The same report placed Royal Bank of Canada (RBC) in their Runners Up category which includes FIs that have taken steps to ban investments in cluster munition manufacturing

companies; these steps are however not comprehensive enough and allow for certain loopholes for indirect investment.9

7

IKV Pax Christi & Netwerk Vlaanderen, “Worldwide Investments in Cluster Munitions: A shared responsibility”, Brussels, October 2009, http://www.stopexplosiveinvestments.org/uploads/pdf/worldwide-investments-in-clustermunitions-a-shared-responsibility.pdf

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IKV Pax Christi & Netwerk Vlaanderen, “Worldwide Investments in Cluster Munitions: A shared responsibility”, Brussels, October 2009, p.24.

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7 Our Research and Report

The Canadian banking industry includes 22 Schedule I (domestic) banks that are authorized by the Office of the Superintendent of Financial Institutions to operate in Canada.10

Schedule I banks are the focus of research due to their Canadian domestic status and

registration, the fact that their executive bodies and boards must adhere to and operate under Canadian law, and that they must adhere to Canadian regulations. Subsidiaries were also contacted where possible to determine their policy positions in relation to their owner institution. The Equator Principles are a set of financial industry benchmarks for determining, assessing and managing social and environmental risk in project financing.11 Many Schedule I banks have signed on to and adhere to the Equator Principles, however they do not have industry-specific standards and thus do not regulate or guide FIs responsible investment policies pertaining to cluster munitions.12

For the purpose of this research, a producer of cluster munitions is defined as follows:

• Any company or group of companies that, itself or through a subsidiary, develops or produces cluster munitions and/or explosive submunitions according to the definition in the Convention on Cluster Munitions.

• Any company or group of companies that, itself or through a subsidiary, develops or produces key components for cluster munitions or explosive submunitions.

We consider a company or group of companies a cluster munitions producer when any part, however small, of its total turnover is derived from cluster munitions regardless of the nature of the company’s other activities. We do so, because most cluster munitions are made by

companies that also produce other defence and/or civil products.

Since the Government of Canada has not yet ratified the Convention on Cluster Munitions, there are no current Canadian regulations that prohibit financial institutions from financing cluster munitions. Mines Action Canada conducted this research over the period of November 2009 to January 2010 to determine where Canadian FIs stand, promote transparency of these policies, to work with them to develop or strengthen their disinvestment policies, and to provide a reference for the Canadian public to be equipped with this knowledge and to be able to invest responsibly.

Please note that this report was prepared with the best information available to us at the time of writing. We welcome all comments and corrections to ensure that this

information is as accurate as possible. Comments can be sent to [email protected].

10

Canadian Bankers Association, ‘Banks Operating in Canada’, 2010, www.cba.ca 11

The Equator Principles, July 2006, http://www.equator-principles.com/principles.shtml 12

Email from Samantha Hoskins, Equator Principles Financial Institutions Secretariat, Equator Principles, 1 December 2009.

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8 Disinvestment Campaign Recommendations for Canadian Financial Institutions13

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Borrowed from IKV Pax Christi & Netwerk Vlaanderen, “Worldwide Investments in Cluster Munitions: A shared responsibility”, Brussels, October 2009, p.8.

• Financial institutions should develop policies that exclude all financial links with companies involved in producing cluster munitions. Because any investment facilitates production, no exceptions should be made for third-party financial services, for funds that follow an index or for civilian project financing for a company also involved in cluster munitions. Policies should not be narrowed to refusing project financing for cluster munitions.

• Financial institutions should inform the producing company that it has decided to end investment because of the company’s involvement with cluster munitions. The financial institutions can set clear deadlines with a limited time frame within which the company must cease production of cluster munitions if it wishes the disinvestment decision to be reversed. When a company persists in producing cluster munitions after the set deadline, the financial institution will disinvest until the company terminates production of cluster munitions. New applications for investment will be declined until the company has halted all activities related to the production of cluster munitions.

• Financial intuitions should apply their disinvestment policy to all activities: commercial banking, investment banking and asset management. All such activities aid and abet a company’s production of cluster munitions. When this new course of action requires a change in investment fund management, investors should be notified of this and given a deadline for withdrawing from these funds. After this deadline, management strategy will change and shares and obligations in companies involved in cluster munitions will be sold.

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Summary of Canadian FI investment implicated involvement

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Hall of Shame

The following overview summarizes the types of financial relationships that financial institutions have with producers of cluster munitions.

Key: B = ownership or management of (convertible) bonds, L = provision of loan facility,

S = ownership or management of shares, X = underwriting of share issues, Y = underwriting of bonds

issues. Financial Institution Country of origin

Cluster munitions producers

A lli a n t T e c h s y s te m s A T K ( U S ) H a n w h a ( S o u th K o re a ) L -3 C o m m u n ic a ti o n s ( U S ) L o c k h e e d M a rt in ( U S ) P o o n g s a n (S o u th K o re a ) R o k e ts a n (T u rk e y ) S in g a p o re T e c h n o lo g ie s (S in g a p o re ) T e x tr o n BMO Financial Group Canada L Caisse de Depot et Placement du Québec Canada S Canada Pension Plan Investment Board Canada S Canadian Imperial Bank of Commerce Canada B CI Financial Corporation Canada S Scotiabank Canada L L Runners-up category Financial Institution Country of origin* Is the policy published? Does the policy exclude cluster munitions producers? Does the policy exclude all cluster munitions producers (no exceptions for certain types?) Does the policy apply to all the products of the financial institution ? Are all company's activities excluded? Royal Bank of Canada Canada X X X X

* The countries of origin of all the financial institutions listed in the Hall of Fame and Runners-up category have signed the Convention on Cluster Munitions

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Adapted from IKV Pax Christi & Netwerk Vlaanderen, “Worldwide Investments in Cluster Munitions: A shared responsibility”, Brussels, October 2009, p.13.

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Canadian Financial Institutions & Individual Recommendations

1.1 Currently Implicated Banks

1.1.1 Caisse de Depot et Placement du Québec Communication with the Institution

The Senior Vice President of Policies and Compliance has been the point person and

representative for the Caisse during recent communications with MAC since December 2009. MAC forwarded the Caisse information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and

disinvestment recommendations.

MAC requested clarification regarding the implication of the Caisse’s ownership or management of 0.14% of the shares in Poongsan Holding, valued at US$0.1 million15. The Caisse was requested to clarify its position on the above implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment policy. MAC also welcomed further explanation behind the Caisse’s responsible investment policies and practices.

Existence of Policy & Position

The Caisse’s Socially Responsible Investment Policy has been in force and made public since 2005. The policy acknowledges socially responsible investment as an essential factor in the pursuit of sustainable economic development. It outlines the Caisse’s expectations of how they expect companies in which it invests to conduct themselves as good corporate citizens in the communities in which they operate. This policy is applied by taking preliminary steps to determine the company’s social, ethical and environmental criteria. The Caisse engages in dialogue with the company regarding issues involved in socially responsible investment. Finally, there is the exercise of proxy voting rights in alignment with the principles under the socially responsible investment policy (see policy link below)16.

The Caisse has verified that this policy does not include any exclusion of sectors or a list of excluded companies based on their socially irresponsible actions. The Caisse favours instead a practice of environment, social and governance (ESG) integration rather than exclusion and screening17.

The Caisse does not have a policy statement or list pertaining to cluster munition

manufacturers, though they have been following the Dublin and Oslo processes and are considering the issue of cluster munitions in line with Canada’s position and legislation. No formal position has been taken thus far.18

15

16

Caisse de Depot et Placement du Québec, “Policy on Socially Responsible Investment”, January 2008, Montréal, p.2-4.

17

Email from Ginette Depelteau, Senior Vice président Policies and Compliance, Caisse de Depot et Placement du Québec, 18 December 2009.

18 Ibid.

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11 The Caisse is aware of the IKP Pax Christi and Netwerk Vlaanderen report, and have stated that the figure of 0.14% of shares with Poongsan Holding is incorrect, yet they have not provided verification or provision of other information regarding this implication19. Contact Information & Reference

Investing Responsibly – Webpage

http://www.lacaisse.com/en/responsabilite/Pages/responsabilite.aspx

Responsible Investment Practices - Webpage

http://www.lacaisse.com/en/responsabilite/pratiques/Pages/pratiques.aspx

Social Responsibility Investment policy (under Governance section under Act, Regulations and policies) - Online Document

http://www.lacaisse.com/en/gouvernance/Documents/politique_investissement_responsable_en.pdf

Contact the Caisse - Webpage

http://www.lacaisse.com/en/pages/nousjoindre.aspx

Next steps20

The Caisse should develop a comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy.

The Caisse should inform Poongsan Holding that it has decided to end investment due to the company’s involvement as a producer of cluster munitions. The Caisse can set clear deadlines with a limited timeframe within which Poongsan must cease production of cluster munitions if it wishes the disinvestment position to be reversed.

The Caisse should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.1.2 Canadian Imperial Bank of Commerce (CIBC) Communication with the Institution

The Director of Investor Relations has been the point person and representative for CIBC during recent communications with MAC since November 2009. MAC forwarded CIBC information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

MAC requested clarification regarding the implication of CIBC’s ownership or management of 6.5% of the five-year convertible notes with a coupon rate of 2.75% that Alliant Techsystems (a cluster munition producer) issued in September 2006, valued at US$19.5 million21. CIBC was

19 Ibid. 20

Recommendations borrowed from IKV Pax Christi & Netwerk Vlaanderen, “Worldwide investments in cluster munitions: a shared responsibility”, Brussels, October 2009, p.8

21

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12 requested to clarify its position on the above implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment policy. MAC also welcomed further explanation behind CIBC’s responsible investment policies and practices.

Existence of Policy & FI Position

At present, CIBC does not have a specific responsible investment policy related to cluster munitions. Nor is there a specific responsible investment policy available outlining CIBC’s investment standards and criteria for selection or exclusion of a given investment.

CIBC maintains that they are aware of the cluster munition issue and monitors the proceedings that are underway, however has not been in a position to comment on a client relationship where they have a lending arrangement22. No specific response to the implication with Alliant Techsystems, either confirmation or information to the contrary, has been issued thus far. CIBC does however implement standards and procedures on the lending and wholesale side with regards to environmental risk. Guidance on issues to consider during the investment process has been in place and they do engage with external parties to solicit input when making investment decisions that could negatively affect the environment23. There is however no similar provision for financing guidance or criteria with regards to weapons or cluster munitions. Contact Information & Reference

Annual Accountability Report 2009 – Online Document

http://www.cibc.com/ca/pdf/about/aar09-en.pdf

Public Accountability Section only – Online Document

http://www.cibc.com/ca/pdf/about/pas-09-en.pdf

Contact CIBC - Webpage

http://www.cibc.com/ca/investor-relations/contact-inv-rel.html

Next steps24

CIBC should develop a comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy.

CIBC should inform Alliant Techsystems that it has decided to end investment due to the

company’s involvement as a producer of cluster munitions. CIBC can set clear deadlines with a limited timeframe within which Alliant Techsystems must cease production of cluster munitions if it wishes the disinvestment position to be reversed.

CIBC should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

22

Conference call with Jason Patchett, Director of Investor Relations, Canadian Imperial Bank of Commerce, 7 January 2010.

23

Conference call with Chris Snyder, Senior Director of Environmental Risk Management, Canadian Imperial Bank of Commerce, 7 January 2010.

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13 1.1.3 Canada Pension Plan Investment Board (CPPIB)

Communication with the Institution

The Senior Policy Advisor and Vice-President of Communications and Stakeholder Relations have been the point persons and representatives for CPPIB during recent communications with MAC since December 2009. MAC forwarded CPPIB information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

MAC requested clarification regarding the implication of CPPIB’s ownership or management of 0.12% of the shares in Hanwha Corporation (a cluster munition producer), valued at US$2 million25. CPPIB was requested to clarify its position on the above implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a

comprehensive disinvestment policy. MAC also welcomed further explanation behind CPPIB’s responsible investment policies and practices.

The Policy on Responsible Investing was first adopted in 2005 in which CPPIB considers

environment, social and governance (ESG) factors to guide corporate behaviour and investment management processes. 26 This policy outlines how CPPIB encourages responsible behaviour in their public equity portfolio via an engagement strategy, which is primarily focused on

Canadian companies. Engagement processes that incorporate ESG factors include: engagement focus areas through portfolio review, collaborative engagement with other institutional investors, direct engagement with companies, industry dialogue and exercising proxy votes (under a separate policy of Proxy Voting Principles and Guidelines).27

Engagement focus areas are concentrated around climate change and extractive industries, while engagement beyond these focus areas include a clause on anti-personnel landmines and cluster munitions.28 This clause states that investment in companies that are not compliant with the Anti-Personnel Mines Convention Implementation Act (Canadian law) is prohibited.

Similarly, CPPIB continues to monitor the CCM and the forthcoming Canadian legislation to exclude companies whose practices are not compliant with the Oslo Convention.29

CPPIB has responded stating that they have recently conducted research on companies in their investment portfolio to request disclosure regarding the company’s compliance with the terms of the Convention on Cluster Munitions. CPPIB has subsequently chosen to disinvest in a number of aerospace and defence companies due, in part, to the fact that Canada is a signatory to the Convention.30

CPPIB has also stated that there are some reports in circulation [unspecified] that incorrectly state that they own shares in companies that produce cluster munitions. CPPIB did not clarify if this, or if their disinvestment process, included Hanwha Corporation. However their listing of

25

26

CPPIB, “Policy on Responsible Investing”, Toronto, February 2009, p.1-2. 27

CPPIB, “Policy on Responsible Investing”, Toronto, February 2009, p.2-5. 28

CPPIB, “2009 Report on Responsible Investing”, Toronto, July 2009, p.6-8.

29

CPPIB, “2009 Report on Responsible Investing”, Toronto, July 2009, p.8.

30_{Email from Ian M. C. Dale, Senior Vice President of Communications and Stakeholder Relations, CCPIB, 21}

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14 foreign publicly-traded equity holdings shows CPPIB portfolio holdings as of March 31, 2009 and Hanwha Corporation is not listed, which means that these shares could have been sold.31 Contact Information & Reference

Responsible Investing – Webpage

http://www.cppib.ca/Responsible_Investing/

Policy on Responsible Investing – Online Document

http://www.cppib.ca/files/PDF/Responsible_Investing_Policy_2009.pdf

CPPIB 2009 Report on Responsible Investing – Online Document

http://www.cppib.ca/files/PDF/CPPIB_RRI09_Eng.pdf

Contact CPPIB - Webpage

http://www.cppib.ca/contact.html

Next steps32

CPPIB should develop a comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy.

Since not yet clarified, CPPIB should inform Hanwha Corporation that it has decided to end investment due to the company’s involvement as a producer of cluster munitions. CPPIB can set clear deadlines with a limited timeframe within which Hanwha Corporation must cease production of cluster munitions if it wishes the disinvestment position to be reversed.

CPPIB should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.1.4 CI Financial Corporation Communication with the Institution

Following a series of attempts to contact senior management at CI Financial Corporation, the Director of Communications responded to MAC’s inquiries in January 2010. MAC forwarded CI Financial information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

MAC requested clarification regarding the implication of CI Financial’s ownership or

management of 1.4% of shares in Alliant Techsystems, valued at US$31 million33. CI Financial was requested to clarify its position on the above implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment

31

CPPIB, “Foreign Publicly-Traded Equity Holdings as of March 31, 2009”, Toronto, March 2009,

http://www.cppib.ca/files/PDF/Foreign_Equity_Holdings_March31_2009_ENG.pdf 32

33

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15 policy. MAC also welcomed further explanation behind CI Financial’s responsible investment policies and practices.

CI Financial has clarified that their primary business is to offer investment funds to retail investors in Canada. Their 100 plus mutual funds have investment mandates that vary

according to factors such as asset class, geographical focus and sector focus. The investment mandates of its funds cannot be unilaterally changed due to securities legislation. In relation to any existence of responsible investment policies, CI responded that:

“CI’s funds do not currently have social investment screens. There has been no demand from the investors in our funds for such screens and we do not plan to propose social investment criteria for our funds.”34

Contact Information & Reference

Contact CI Financial Corporation - Webpage

http://www.ci.com/web/ci_financial/ci_contact.jsp

Next steps35

CI Financial Corporation should develop a comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy.

CI Financial Corporation should inform Alliant Techsystems that it has decided to end

investment due to the company’s involvement as a producer of cluster munitions. CI Financial Corporation can set clear deadlines with a limited timeframe within which Alliant Techsystems must cease production of cluster munitions if it wishes the disinvestment position to be

reversed.

CI Financial Corporation should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.1.5 Scotiabank (Bank of Nova Scotia) Communication with the Institution

The Senior Manager of Corporate Social Responsibility has been the point person and

representative for Scotiabank during recent communications with MAC since November 2009, while the Vice President of Corporate Social Responsibility issued the formal response. MAC forwarded Scotiabank information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

MAC requested clarification regarding the implication of Scotiabank’s involvement in the 31-bank syndicate supporting Lockheed Martin’s (an implicated cluster munition producer) renewed

34

Email from Murray Oxby, Director of Communications, CI Investments Inc., 6 January 2010. 35

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16 US$1.5 billion five-year revolving credit facility which has been extended until the end of June 2012. Scotiabank contributed US$37.5 million to this facility36.

Additional clarification was requested regarding the implication of Scotiabank’s involvement in the 19-bank syndicate supporting the following Textron Financial Corporation (a cluster munition producer) activities:

• The amendment of Textron’s US$1.25 billion five-year revolving credit facility (concluded in March 2005) for the second time, extending the maturity date to April 2012. This facility is being used to support the issue of commercial paper. Scotiabank contributed US$45 million to this facility. 37

• The amendment of Textron’s US$1.75 billion five-year revolving credit facility (secured in April 2006), extending the maturity date to April 2012. This credit facility is being used to repay current debts, to support the issue of commercial paper and for general corporate purposes. Scotiabank contributed US$65 million to this facility38.

Scotiabank was requested to clarify its position on the above implications, to disinvest in these and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment policy. MAC also welcomed further explanation behind CI Financial’s responsible investment policies and practices.

Scotiabank also has been implicated in the past related to their investments in cluster munitions producers, including the following:

• In December 2004 GenCorp (a cluster munitions producer) secured a new US$ 180 million credit facility from a banking syndicate. The Bank of Nova Scotia

(Scotiabank) was involved in arranging this facility.39

• In March 2005 Raytheon (a cluster munitions producer) secured a US$ 2.2 billion (€ 1.7 billion) five year revolving credit facility from an international banking syndicate. The Bank of Nova Scotia (Scotiabank) participated in this syndicate including an investment of US$70 million.40

• In March 2005 Textron Inc. (a cluster munition producer) secured a US$ 1.25 billion (€ 1 billion) five year revolving credit facility from an international banking syndicate. The Bank of Nova Scotia (Scotiabank) participated in this syndicate including an

investment of US$45 million.41 Existence of Policy & Position

Scotiabank has informed MAC of the existence of their comprehensive risk management framework that is in place and that for several years, the bank has had special provisions in their credit policies with respect to arms and munitions dealers (although no policy information referring to these provisions has been located on their website’s publicly available information).

36

37

38

39

Netwerk Vlaanderen, “Explosive Investments: Financial Institutions and Cluster Munitions”, Brussels, February 2007, p.7 & 16.

40 Ibid. 41

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17 Scotiabank has verified that they are in the process of updating these policies, which will result in the creation of a bank-wide Restricted Business List, of which, cluster munitions will form a part of.42 No details or timeline have been given for this process.

Scotiabank has stated that due to their respect for privacy of all clients, they are unable to directly discuss implications involving Lockheed Martin and Textron Financial Corporation.43 Contact Information & Reference

Corporate Social Responsibility - Webpage

http://www.scotiabank.com/cda/content/0,1608,CID11991_LIDen,00.html

2008 Corporate Social Responsibility Report: Public Accountability Statement – Online Document

http://www.scotiabank.com/images/en/filesaboutscotia/20534.pdf

Contact Scotiabank - Webpage

http://askscotia.scotiabank.com/askscotia/index.jsp

Next steps44

Scotiabank should develop a comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy.

Scotiabank should inform both Textron Financial Corporation and Lockheed Martin that it has decided to end investments due to the companies’ involvement as producers of cluster munitions. Scotiabank can set clear deadlines with a limited timeframe within which both Textron Financial Corporation and Lockheed Martin must cease production of cluster munitions if they wish the disinvestment position to be reversed.

Scotiabank should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

42

Email from Kaz Flinn, Vice President of Corporate Social Responsibility, Scotiabank, 10 December 2009. 43

Ibid. 44

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18

1.2 Previously Implicated Banks

1.2.1 Bank of Montreal (BMO) Communication with the Institution

The Bank of Montreal (BMO) has past implications relating to their investments in cluster munitions producers. In March 2005 Textron Inc. secured a US$ 1.25 billion (€ 1 billion) five year revolving credit facility from an international banking syndicate, in which the Bank of Montreal invested US$45 million.45

The Director of Corporate Responsibility and Sustainability has been the point person and representative for BMO during recent communications with MAC since November 2009. The Director had also responded to earlier inquiries by MAC in February 2009.

MAC forwarded BMO information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

BMO was requested to clarify its policy position and current status relating to the previous implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment policy. MAC also welcomed further explanation behind BMO’s responsible investment policies and practices.

Under the Frequently Asked Questions (FAQ) and Glossary webpage, BMO has included a policy statement relating to the arms industry and cluster munitions producers:

“When making a financing decision, in addition to regular credit criteria, BMO takes into consideration ethical, political, social and economic factors. BMO is not prepared to extend loans for transactions that are outside the national defense policies or international treaty obligations (such as NATO) of Canada and the U.S. and which have as their objective the international transfer of military equipment or civilian equipment for military or internal security purposes. All transactions must be consistent with Canadian and U.S. national defense policies or their international treaty obligations. As well, transactions originated in non-Canadian/U.S. jurisdictions must be consistent with the national defense policies or international treaty obligations of the relevant jurisdictions.”46

BMO has stated that they do not discuss specific information related to their clients for confidentiality purposes and as such would not comment on the implication involving their investments in Textron. They also noted that they do not have a policy specific to cluster munitions, but that this would fall under their above-quoted defence and weapons policy. BMO affirms that they continually review their portfolio to understand the various risks associated with

45_{Netwerk Vlaanderen, “Explosive Investments: Financial Institutions and Cluster Munitions”, Brussels, February}

2007, p.8. 46

Bank of Montreal, “FAQ & Glossary”, http://www2.bmo.com/content/0,1089,divId-7_langId-1_navCode-4918,00.html#faq_5b

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19 certain types of investments Additionally, should the Government of Canada ratify and adopt the Convention on Cluster Munitions, BMO would adhere to this law.47

Policy Reference to the Arms Industry - Webpage

http://www2.bmo.com/content/0,1089,divId-7_langId-1_navCode-4918,00.html#faq_5b

2008 Corporate Responsibility Report and Public Accountability Statement – Online Document

http://www2.bmo.com/bmo/files/images/7/1/BMO_CRPAS2008en.pdf

Contact BMO – Webpage

http://www2.bmo.com/content/0,1089,divId-7_langId-1_navCode-4688,00.html

Next steps48

The Bank of Montreal should develop a fully comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy. Should BMO continue to be involved in the Textron credit facility whose maturity date was extended until April 2012, BMO should inform Textron that it has decided to end investment due to the company’s involvement as a producer of cluster munitions. BMO can set clear deadlines with a limited timeframe within which Textron must cease production of cluster munitions if it wishes the disinvestment position to be reversed.

The Bank of Montreal should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.2.2 Royal Bank of Canada (RBC) Communication with the Institution

The Royal Bank of Canada (RBC) has previous implications relating to their investments in cluster munitions producers. In July 2005 EADS (a cluster munition producer) renewed a € 3 billion (US$ 3.65 billion) seven year revolving credit facility from an international banking syndicate, in which RBC invested €45 million.49

The Senior Manager of Enterprise Risk Policy, Group Risk Management, has been the point person and representative for RBC during recent communications with MAC since November 2009.

MAC forwarded RBC information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

47

Conference call with Ula Ubani, Director of Corporate Responsibility & Sustainability, Bank of Montreal, 11 January 2010.

48

Recommendations borrowed from IKV Pax Christi & Netwerk Vlaanderen, “Worldwide investments in cluster munitions: a shared responsibility”, Brussels, October 2009, p.8.

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20 RBC was requested to clarify its policy position and current status relating to the previous implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment policy. MAC also welcomed further explanation behind RBC’s responsible investment policies and practices.

The October 2009 IKV Pax Christi & Netwerk Vlaanderen report categorizes some financial institutions as ‘Runners-up’: these institutions have made significant efforts to ban cluster munitions from their investment portfolios. However, they have thus far failed to qualify for the Hall of Fame category due to the existence of loopholes in their current policies that may still permit the financing of cluster munitions.50

RBC has qualified for the Runners-up category in the above report as it states that it will not be involved in the direct financing of companies that manufacture material for cluster bombs. It has subsequently been recommended that to qualify for the Hall of Fame category, RBC should extend this policy to all of its financial activities (including asset management and investment banking) since it currently only applies to credits.51

RBC includes environmental, social and governance (ESG) criteria in their investment process, and has a responsible lending policy relating to cluster munitions under their Product

Responsibility framework52. “RBC will not support or finance transactions that are directly

related to trade in or manufacturing of material for nuclear, chemical, and biological warfare, landmines or cluster bombs.”53

RBC has confirmed that it has recently reviewed its policy regarding the financing of cluster munitions and it will be amended as follows (2009 amendments in bold), to be published in the 2009 Corporate Responsibility Report:

“… there are certain types of clients and transactions that must in all cases be avoided. These include … the direct financing of companies manufacturing or trading in equipment or materiel for nuclear, chemical or biological warfare, landmines or cluster bombs; and situations where

it is clear that RBC would be providing implicit or indirect financing support for transactions involving any of the above activities”.54

MAC requested clarification of the above 2009 amendment, including questions relating to the full exclusion of this policy, if there is room for exceptions in certain situations, if this policy is applied to all services provided (including investment banking, asset management for their own accounts and for third parties), how RBC will be implementing this (i.e. by excluding certain companies or only certain transactions) and how RBC will translate the ‘implicit’ or ‘direct’ investments. RBC responded by stating that they believe their policy in its revised state allows for clear interpretation by their various businesses and that any questions that do arise will be

50

IKV Pax Christi & Netwerk Vlaanderen, “Worldwide investments in cluster munitions: a shared responsibility”, Brussels, October 2009, p.75.

51

IKV Pax Christi & Netwerk Vlaanderen, “Worldwide investments in cluster munitions: a shared responsibility”, Brussels, October 2009, p.81-82.

52

Royal Bank of Canada, “2008 Annual Report”, Toronto, p.23, and Royal Bank of Canada, “2008 Corporate Responsibility Report and Public Accountability Statement”, Toronto, p27.

53

Royal Bank of Canada, “2008 Corporate Responsibility Report and Public Accountability Statement”, Toronto, p.27. 54

Email from Steve Neale, Senior Manager of Enterprise Risk Policy, Group Risk Management, Royal Bank of Canada, 27 November 2009.

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21 referred to senior management on a case by case basis. RBC does not believe the policy requires any additional or more detailed explanation.55

Contact Information & Reference Corporate Responsibility – Webpage

http://www.rbc.com/responsibility/index.html

2008 Corporate Responsibility Report and Public Accountability Statement – Online Document

http://www.rbc.com/responsibility/pdf/RBC-CRR-Report-2008-e.pdf

Contact RBC - Webpage

http://www.rbc.com/contactus/community_contact.html

Next steps56

RBC should further develop a fully comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions, focusing on the clarifications requested above by MAC in December 2009. Since any investment facilitates production, no exceptions should be made within the policy.

RBC should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.2.3 Toronto Dominion Bank (TD) Communication with the Institution

The Toronto Dominion Bank Financial Group (TD) has previous implications relating to their investments in cluster munitions producers. In July 2005 EADS (a cluster munition producer) renewed a € 3 billion (US$ 3.65 billion) seven year revolving credit facility from an international banking syndicate, in which TD invested €45 million.57

The Vice President of Government and Community Relations responded to Mines Action Canada in May 2009 following initial inquiries, while the Senior Manager of Corporate Environmental Affairs has represented TD during recent communications.

MAC forwarded TD information pertaining to the disinvestment campaign, information released in the October 2009 report by IKV Pax Christi and Netwerk Vlaanderen, and disinvestment recommendations.

TD was requested to clarify its policy position and current status relating to the previous

implication, to disinvest in this and any other investments in cluster munition manufacturers, and to develop a comprehensive disinvestment policy. MAC also welcomed further explanation behind TD’s responsible investment policies and practices.

55_{Email from Steve Neale, Senior Manager of Enterprise Risk Policy, Group Risk Management, Royal Bank of}

Canada, 17 December 2009. 56

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22 Existence of Policy & Position

Following MAC correspondence with TD earlier in May 2009, the Vice President of Government and Community Relations responded stating that to date TD had not developed any formal policy specific to cluster munitions. In line with their environment, social and governance (ESG) and sustainable investing approaches, they were however monitoring the Convention on Cluster Munitions.58

MAC’s recent communications with the department for Corporate Environmental Affairs have revealed that TD will insert the following passage to their 2009 Corporate Social Responsibility report:

“TD does not lend money for transactions that would involve activities within World Heritage sites, would result in degradation of protected critical natural habitats as designated according to World Conservation Union classification, or would involve purchase of timber from illegal logging operations. We do not lend money for transactions that are directly related to the trade in or manufacturing of material for nuclear, chemical or biological weapons, or for landmines or cluster bombs.”59

Contact Information & Reference Corporate Responsibility – Webpage

http://www.td.com/corporateresponsibility/crr2008/index.jsp

2008 Corporate Responsibility Report – Online Document

http://www.td.com/corporateresponsibility/crr2008/pdf/2008_tdcrr_report.pdf

Contact Toronto Dominion – Webpage

http://www.td.com/contact.jsp#tdbfg

Next steps60

Toronto Dominion Bank should further develop a fully comprehensive disinvestment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy.

Toronto Dominion should apply their disinvestment policy to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

58

Letter from Scott Mullin, Vice President of Government and Community Relations, TD Bank Financial Group, May 2009.

59

Email from Michelle McCulloch, Senior Manager of Corporate Environmental Affairs, TD Bank Financial Group, 22 January 2010.

60

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23

1.3 Other Domestic Banks/Subsidiaries

1.3.1 Bank West (owned by 1.3.19 Western Financial Group) Communication with the Institution

Bank West, a wholly owned subsidiary of Western Financial Group, is a Schedule I (domestic) bank authorized to operate in Canada.61 Service provision is focused on insurance and financial services in western Canada.

Neither Bank West nor Western Financial Group have been implicated in any investments in cluster munition producers. They were however contacted to determine the full extent of their investment portfolio and to solicit their policy stance on investments in cluster munition

producers.

A Controller at Bank West responded to inquiries stating that they do not have any foreign investments and do not have any investments in munitions manufacturers.62

The interim contact for Investor Relations at Western Financial Group also confirmed that neither they nor Bank West invest in any cluster munition manufacturers. The majority of their investments are government bond securities and there is also an investment management policy in place which ensures the adherence to procedures governing securities investment decisions. Their portfolio and policy are reviewed regularly by senior management and the Board of Directors.63

See also 1.3.19 Western Financial Group. Contact Information & Reference

Contact Bank West - Webpage

http://www.bankwest.ca/Content/ContactInfo.aspx

Next steps64

Should Bank West expand its operations to include an international investment portfolio, it should develop a comprehensive investment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy. The investment policy should apply to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

61

Canadian Bankers Association, ‘Banks in Canada’, Toronto, 2010, www.cba.ca 62

Email from Neil MacIntosh, Controller, Bank West, 12 January 2010. 63

Email from Arlene Beggs, Interim contact for Investor Relations, Western Financial Group, 6 January 2010. 64

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24 1.3.2 Bridgewater Bank

Communication with the Institution

Bridgewater Bank, a wholly owned subsidiary of the Alberta Motor Association, is a Schedule I (domestic) bank authorized to operate in Canada.65 Service provision is focused on residential mortgage financing and Guaranteed Investment Certificates (GIC).

Bridgewater Bank has not been implicated in any investments in cluster munition producers. They were however contacted to determine the full extent of their investment portfolio and to solicit their policy stance on investments in cluster munition producers.

The Manager of Communications and Client Relations has confirmed that Bridgewater Bank does not lend or accept deposits from corporations, businesses or governments. Their

corporate social responsibility focus is therefore on issues within their immediate working areas and involvement, and do not have policies or position statements that relate to weapons or cluster munitions financing. Bridgewater Bank does not perceive a need to pursue such policies or positions at this time given the scope of their operations.66 Mines Action Canada requested additional clarification regarding the existence of any investment schemes outside of Canada but has yet to receive a response.

Contact Information & Reference Contact Bridgewater Bank - Webpage

http://www.bridgewaterbank.ca/cps/rde/xchg/SID-53ED365C-9A0BFEBC/bridgewater/web/16_115.htm

Next steps67

Should Bridgewater Bank expand its operations to include an international investment portfolio, it should develop a comprehensive investment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy. The investment policy should apply to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.3.3 Canadian Tire Bank Communication with the Institution

Canadian Tire Bank is a member of Canadian Tire Financial Services Limited, which is owned by the Canadian Tire Corporation, Limited. It is a Schedule I (domestic) bank authorized to operate in Canada.68 Service provision is focused on credit cards and related financial products and services for retail and petroleum customers. Additionally, they offer savings accounts, Guaranteed Investment Certificates (GIC), personal loans, lines of credit, insurance and warranty products.69

65

Email from Nancy Black, Manager of Communications and Client Relations, Bridgewater Bank, 7 December 2009. 67

68

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25 Canadian Tire Bank has not been implicated in any investments in cluster munition producers. They were however contacted to determine the full extent of their investment portfolio and to solicit their policy stance on investments in cluster munition producers.

The Associate Vice President of Corporate Social Responsibility and Public Affairs has confirmed that Canadian Tire Bank conducted a small retail banking pilot in 2008 yet has decided not to purse this further. They have therefore never offered business loans or

developed an investment portfolio and state that they have no investments in the production of cluster bombs. As such, they do not believe they have a need to develop a disinvestment policy related to the investment of cluster munitions.70

The company does however have foreign operations for a ‘variety of business purposes’.71 This research would benefit from further clarification as to any investments made through or on behalf these foreign operations.

Canadian Tire 2008 Annual/Financial Report – Online Document

http://corp.canadiantire.ca/EN/Investors/FinancialReports/Annual%20Reports%20Library/CTC_AR_2008. pdf

Corporate Social Responsibility Guiding Statement & Policies - Webpage

http://corp.canadiantire.ca/EN/CSR/Pages/GuidingStatementsAndPrinciples.aspx

Contact Canadian Tire Bank - Webpage

http://corp.canadiantire.ca/EN/AboutUs/Pages/ContactUs.aspx

Next steps72

Should the Canadian Tire Bank expand its operations to include an international investment portfolio, it should develop a comprehensive investment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy. The investment policy should apply to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.3.4 Canadian Western Bank Communication with the Institution

Canadian Western Bank is a Schedule I (domestic) bank authorized to operate in Canada.73 Focused on western Canada, they offer personal and business banking and investment options. Along with its subsidiaries and operating divisions, they comprise the Canadian Western Bank Group.

70

Email from Caroline Casselman, Associate Vice President of Corporate Social Responsibility and Public Affairs, Canadian Tire Corporation, 11 December 2009.

71

Canadian Tire Corporation, Limited, “Canadian Tire 2008 Financial Report”, Toronto, 2008, p.42. 72

73

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26 Canadian Western Bank has not been implicated in any investments in cluster munition

producers. They were however contacted to determine the full extent of their investment portfolio and to solicit their policy stance on investments in cluster munition producers. Existence of Policy & Position

The Assistant Vice President of Investor and Public Relations has confirmed that Canadian Western Bank does not engage in any investment activity outside of Canada, and that they do not finance the weapons manufacturing industry which includes cluster munitions.74

Some of Canadian Western Bank’s products are however provided through other financial institutions such as CI Investments (a subsidiary of CI Financial Corporation), RBC Funds Inc., TD Mutual Funds, CIBC Securities Inc., and Scotia Securities Inc.75 These Canadian financial institutions have their own responsible investment policies as outlined in the above sections, while some have been implicated in the financing and investment of cluster munition producers. Contact Information & Reference

2009 Annual Report – Online Document

http://www.cwbankgroup.com/investor_relations/ann_pdfs/2009_CWB_AR.pdf

Contact Canadian Western Bank – Webpage

http://www.cwbankgroup.com/contact/

Next steps76

Should Canadian Western Bank expand its operations to include an international investment portfolio, it should develop a comprehensive investment policy that excludes all financial links with companies involved in producing or manufacturing cluster munitions. Since any investment facilitates production, no exceptions should be made within the policy. The investment policy should apply to all activities, including commercial banking, investment banking and asset management, all of which aid and abet a company’s production of cluster munitions.

1.3.5 Citizens Bank of Canada (owned by 1.3.18 Vancity) Communication with the Institution

Citizens Bank of Canada, a wholly owned subsidiary of Vancity Credit Union, is a Schedule I (domestic) bank authorized to operate in Canada.77 They offer a range of personal and business services.

Citizens Bank of Canada has not been implicated in any investments in cluster munition producers. They were however contacted to determine the full extent of their investment portfolio and to solicit their policy stance on investments in cluster munition producers.

74

Email from Kirby Hill, Assistant Vice President of Investor and Public Relations, Canadian Western Bank, 16 December 2009.

75

Canadian Western Bank, ‘Products’, Edmonton, 2010, http://www.canadianwesternfinancial.com/products/ 76

77