Scotiabank Environmental Policy [ top ]

Scotiabank has a long-standing environmental policy, in place since 1991, as well as specific policies and practices relating to individual business lines. The Bank's Board of Directors reviews and approves these policies, and executive officers are designated responsible for their implementation. On a day-to-day basis, employees across the Bank deal with environmental issues involving our branch operations, real estate holdings and lending practices.
Our policy includes:

• Maintaining recycling and resource management programs that meet or exceed legislated environmental requirements;
• Conducting our internal operations in a manner consistent with environmental protection and the principles of sustainable development, with due regard for associated benefits and costs;
• Promoting an environmentally responsible workplace by educating and motivating employees to become more involved in the conservation of resources;
• Monitoring the effectiveness of all our environmental activities by conducting environmental audits and assessments of compliance with the Bank's requirements;
• Incorporating and maintaining environmental assessment criteria in our risk management procedures and in the ongoing management of our assets;
• Including environmental criteria in assessing relationships with contractors and suppliers; and
• Contributing to an ongoing dialogue with government, industry and relevant stakeholder groups to establish environmental goals.

Environmental risk lending policy [ top ]

Scotiabank has an Environmental Lending Policy in place which factors environmental considerations into the Bank's credit evaluation procedures. The policy and related procedures, which identify industries and business areas of high environmental risk, are designed to ensure appropriate consideration of the environmental risks associated with the business operations of each borrower throughout the borrowing relationship.

Environmental real estate practices [ top ]

Scotiabank's Real Estate Department is committed to developing real estate solutions for the Bank and its customers, with due consideration of environmental matters. The group adheres to an Environmental Compliance Policy to ensure responsible management of Bank assets, with both an appreciation of the benefits of sustainable development and due regard for sound business principles.

The Real Estate Department piloted a more environmentally efficient branch, located at Queensway and Islington in Toronto. The design for this branch location incorporates environmentally friendly materials and energy-saving technologies. In recognition, the Bank received an Energy Innovators award from the federal government. The lessons learned from this branch were assessed in 2003 and rolled out into our standard branch specifications, where appropriate.

Conservation efforts [ top ]

The Aug. 14, 2003, blackout in Ontario and the northeastern United States - the largest power outage in North American history - clearly highlighted our dependence on essential resources, such as electricity. Scotiabank played its part, by taking special steps during the crisis, and by building conservation and efficiency initiatives into our everyday operations.

• During the crisis, we heeded the provincial government's call to reduce power usage by encouraging employees to work from home, reduce non-essential operations, and minimize our usage of premises lighting, computers and air conditioning until power was fully restored the following week. Scotiabank was cited in the media by the Province of Ontario for its exceptional efforts.
• We were also recognized by Natural Resources Canada for our commitment to energy efficiency and reducing greenhouse gas emissions throughout the year.
• To further reduce energy consumption, branch administrative manuals require that employees shut off equipment and dim lights after business hours. The Bank is also updating older lighting systems with more efficient fixtures.
• As a result of our national toner cartridge recycling program, nearly 100 per cent of printer and photocopier toner cartridges are being reused each year.
• Across our branches and all Bank departments, we maintain recycling centres for paper, glass and garbage. At our Scotia Plaza offices in Toronto, for example, employees recycled more than 600 tonnes of paper and 60 tonnes of cardboard. At this location, we achieved a 74 per cent waste diversion rate, up from 72 per cent the previous year.
• When the residents of the Annex community in central Toronto decided to revive an innovative but long-dormant ecology park, Scotiabank provided a donation to construct pathways and planting areas that include native plants, a meadow to encourage butterflies and birds, and a teaching garden.
• Scotiabankers at our Vankleek Hill, Ont., branch pitched in to protect an important part of their local ecosystem. Staff worked with members of the district nature society to hold a sale of mushroom compost and plastic planters, the proceeds from which went toward the purchase and protection of 13 acres of the nearby Alfred Bog.

Environment-friendly practices [ top ]

Whenever possible, we continuously strive to adopt environmental considerations into our operations, including the development of our products and services and our purchases of equipment, stationery and other supplies.

• The vast majority of the Bank's printed forms are on recycled paper stock, and our print suppliers ensure a high degree of efficiency in paper and ink usage.
• Our electronic service delivery channels help us reduce paper consumption. For example, at our Cashstop® ABMs, customers have the option of not printing receipts, and we do not send payment envelopes each month to Visa customers who routinely pay their credit card bills by electronic methods.
• Starting in April 2003, we phased out printed payslips for 90 per cent of our close to 35,000 Canadian employees. Instead, they receive online pay notification. This change is expected to save more than 830,000 sheets of paper and envelopes each year.
• In 2003, Scotiabank was on of the first companies in Canada to use FSC (Forest Stewardship Council) certified paper in the production of our annual report, annual Scotiabank wall calendar and this public accountability statement. FSC paper guarantees that at least 17.5 per cent of the wood fibre used in the stock comes from well-managed forests, independently certified by the FSC, and the paper stock is acid free, chlorine free and contains at least 10 per cent post consumer waste. We also encouraged our printer, Quebecor World MIL, to successfully complete the rigorous FSC certification process.
• Scotiabank continued to make every effort to reuse surplus equipment and supplies, donating them to non-profit groups in nearly every country in which we operate. Last year, we donated more than 600 pieces of surplus computer equipment, with an approximate value of $100,000, to charities and community groups across Canada and as far away as the Dominican Republic, India and Eritrea.
• We also donated surplus stationery and other re-useable materials, such as binders, videotape and CD covers, to the Toronto and Peel District school boards, for use in classrooms.

The Scotiabank Group also aims to incorporate environmental considerations in its global operations. For example, our Banco Sudamericano affiliate in Peru created and administers an environmental trust agreement on behalf of borrowing client Antamina, a major mining company. When Antamina sought financing for a new copper/zinc mine in the Ancash community, Scotiatrust developed the first and only trust agreement of its kind in Peru to avoid potential environmental harm in the event of a mine closure.

Through the irrevocable trust, Antamina provides funds to guarantee that they will perform environmental restoration activities, including the construction of a water treatment plant, if the mine is closed in the future and an environmental impact assessment determines that environmental harm has been done.

Financing environmental initiatives [ top ]

As a leading corporate and investment bank to the power industry, Scotia Capital assists a number of clients in financing environmentally friendly hydro, wind-farm, biomass and landfill-gas-fired generating facilities that aid long-term environmental sustainability.

For example, as sole lead underwriter to Clean Power Income Fund, we provided access to equity capital of $142.5 million and bank credit of $135 million to facilitate the client's investment in innovative projects such as Gas Recovery Systems (GRS) Inc., based in California. GRS is one of the largest privately owned bio-gas electricity producers in the United States, and its business is to capture and convert gases from landfill sites into electricity to satisfy consumer and industrial power needs.

Scotia Capital also participated in a $120-million corporate banking syndication to assist Calgary-based Canadian Hydro Developers (CHD) to construct or expand two low-impact run-of-river hydroelectric plants and a new biomass plant. All of CHD's power plants in British Columbia, Alberta and Ontario are "Ecologo" certified by Environment Canada as emissions-free energy sources.

RoyNat Capital, Scotiabank's merchant bank to mid-sized companies, recently helped Waterloo Hydrogeologic Inc. expand its environmental services that help protect the world's finite, fresh water resources. The Waterloo, Ont.-based company develops software that models groundwater flow, including industrial contaminants, and provides consulting and training to environmental professionals, including government officials, in 85 countries. RoyNat Capital provided financing so that the company could expand into new international markets that need support to ensure access to safe, clean water.

Environmental co-operation [ top ]

To support co-operation on environmental issues within the financial services industry and to develop and implement consistent standards and practices, the Scotiabank Group has participated in a number of domestic and international environmental initiatives.

Scotiabank was among the first international banks to endorse the United Nations Environmental Program's (UNEP) Statement by Financial Institutions on the Environment and Sustainable Development. This initiative commits signatories to incorporate environmentally sound practices into their internal operations, their risk assessment and management practices, and the development of products and services.

We also participate with the Canadian Bankers Association's Environmental Issues Group to review the impact of environmental issues and regulations on our lending practices and participate in the development of standards and legislation relating to activities such as environmental assessments and land development.