and Public Accountability Statement - Personal banking · and Public Accountability Statement. ......

2013 Environmental, Social and Governance Reportand Public Accountability Statement

2013 Environmental, Social and Governance Report and Public Accountability Statement1 TableofContents

Table of ContentsAbout this Report 2

Message from the Chair, BMO Sustainability Council 3

Our Sustainability Principles 4

Who We Are 5

Economic Impact 6

Social Impact 7

Impact Investing 8

Sustainability Issues That Matter Most 9

BMO’s ESG Scorecard 20

Stakeholder Engagement 21

Our Leadership Priorities 25

GRI Index 29

Awards and Recognition 49

Glossary of Terms 50

External Assurance Statement 53

Bank of Montreal Public Accountability Statement 55

Bank of Montreal Mortgage Corporation Public Accountability Statement 64

BMO Financial Group2 AboutthisReport

About this ReportThisreportoutlinesoursustainabilityperformance,namely,theenvironmental,socialandgovernance(ESG)issuesthatmattermosttoourbusiness.Thisreportreferstootherpubliclydisclosedinformationpostedonourwebsiteat:www.bmo.com/home/about/banking/corporate-responsibility/our-approach/reporting

Public Accountability Statement

ThisreportincludesthePublicAccountabilityStatements(PAS)forBankofMontrealandBankofMontrealMortgageCorporationandoutlinescertainaspectsofBankofMontreal’scontributions,andthecontributionsofthebank’saffiliateswithoperationsinCanada,totheCanadianeconomyandsociety.ItfulfillstherequirementsoftheCanadianfederalgovernment’sPublicAccountabilityStatementregulations(section459.3oftheBank Act(Canada)).ThePASisonpages55–64.

Reporting Period

Thisreportcoversour2013fiscalyear(November1,2012toOctober31,2013)forouroperationsinCanadaandtheUnitedStates(U.S.),whichwerefertoasourNorthAmericanoperations.InformationisdatedasatOctober31,2013.AlldollaramountsareinCanadianfunds,unlessotherwisenoted.

Reporting Guidelines

TheGlobalReportingInitiative(GRI)G3.1GuidelinesandtheGRIFinancialServicessectorsupplementhavebeenusedinpreparingthisreportandweself-declareanApplicationLevelofB+.TheGRIContentIndexcanbefoundonpage29ofthisreport.

External Assurance

Thisreporthasbeenindependentlyassuredbyanexternalparty.KPMG,whohasbeenengagedbyBMOtoaudititsfinancialstatements,hasalsoperformedalimitedassuranceengagementonaselectednumberofperformanceindicatorsinaccordancewiththeInternationalStandardonAssuranceEngagements3000(ISAE3000).Inthisdocument,thesymbol▲indicatesassuredinformation.KPMG’sassurancereportonselectedperformanceindicatorsisonpages53–54.

KPMGisindependentofthebankwithinthemeaningoftheRulesofProfessionalConductandCodesofEthicsofvariousCanadianprovincialprofessionalaccountingbodiesandunderU.S.securitieslaws,includingRegulationS-X:QualificationsandReportsofAccountants.

2013 Environmental, Social and Governance Report and Public Accountability Statement3 MessagefromtheChair,BMOSustainabilityCouncil

Message from the Chair, BMO Sustainability CouncilFocus where it matters

Our2013Environmental,SocialandGovernanceReportandPublicAccountabilityStatementprovidesclearinsightandcontextaroundthesustainabilityissuesthatmattermosttoourbusiness,stakeholdersandsocietyasawhole.

Certaininformationhasbeenincludedthisyearasweanticipateimpendingdisclosureregulationsandupdatestoestablishedglobalframeworkswillhaveanimpactonoursustainabilitydisclosure.

In2013weachievedsuccessonanumberofimportantfronts:

■ BMOhelpedraiseapproximately$1.8billionofequityanddebtinthecapitalmarketsforentitiesactiveinrenewableenergyacrossNorthAmerica(N.A.).

■ BMOHarrisBankmademorethanUS$536millionincommunitydevelopmentloanstosupporteconomicdevelopment,communityserviceandqualityaffordablehousingforlow-tomoderate-incomefamiliesintheU.S.

■ Weintroducedmulti-yearworkforcerepresentationgoalsandinitiativesineachbusinessgroupforpersonswithdisabilities,Aboriginalpersons,minoritiesandwomen.

■ BMOcontributedmorethan$56millionindonationstonon-profitorganizationsacrossN.A.

■ Wemaintainedourcarbonneutralstatussince2010.Andwerealizedourgoal,statedin2012,offurtherreducingabsoluteenterprisecarbonemissionsfromenergyuseandbusinesstravelby10%,fouryearsaheadofschedule.

YouwillfindyearoveryearperformancemetricsandtargetsinourESGScorecardonpage20.

ParticularlygratifyingtoallofusatBMOwasrecentlylearningourcompanywasrecognizedasthehighest-rankedNorthAmericanfinancialinstitutionontheGlobal100listofmostsustainablecorporationsintheworld.Foreverythingweaspiretobeforourcustomersandotherkeystakeholders,thishonoursignalstousthatwearemakingimportantpositivechangeonagloballevelwhilebeingclearaboutourintentionsthroughtransparency.

Weendtheyearonahighnoteandwithapromisethatindividuallyandcollectivelywewillcontinuetodeliveronmakinggreatthingshappenforourcustomersaroundtheglobewhoweareprivilegedtodobusinesswith.

Pleasetakealookthroughthereportandletusknowwhatyouthinkatsustainability@bmo.com.

Simon Fish General Counsel and Chair, BMO Sustainability Council

BMO Financial Group4 OurApproach

Our Sustainability Principles Weusethetermsustainabilitytodescribeourtriplebottomlineapproachtomanagingtheimpactsofourbusinessactivitiesrelatedtoeconomic,socialandenvironmentaldimensions.

OurSustainabilityPrinciplesguideusaswepursueourstrategicgoals.

Corporate Governance

Weapplythehigheststandardsofcorporategovernanceandadheretoastrictcodeofconductandethics.

Customers

Wearecommittedtoprovidingtheproductsandservicesourcustomersneedinordertomaketheirfinanceslesscomplexandhelprealizetheirfinancialgoals.

Employees

Wewelcomeandsupportindividualsfromdiversebackgrounds,perspectivesandcommunities,andofferopportunitiesforthemtogrowandpursueacareerthatisuniquelytheirs.

Shareholders

Wearecommittedtomanagingourbusinessresponsiblywhileexecutingonourstrategicprioritiestodeliversustainablerevenuegrowth.

Community

Wearecommittedtohelpingimprovethequalityoflifeforpeopleinthecommunitieswhereweliveandwork.

Environment

Wearecommittedtominimizingtheimpactofouroperationsontheenvironmentandtodemonstratingleadershipbyintegratingenvironmentalconsiderationsintoourwiderbusinesspractices.

Supply Chain

BMOiscommittedtopurchasingproductsandservicesfromsociallyandenvironmentallyresponsiblesuppliers.

2013 Environmental, Social and Governance Report and Public Accountability Statement5 WhoWeAre

Who We AreEstablishedin1817asBankofMontreal,BMOFinancialGroup(TorontoStockExchange(TSX),NewYorkStockExchange(NYSE):BMO)isahighlydiversifiedfinancialservicesproviderbasedinNorthAmerica.Withtotalassetsof$537billionandapproximately45,500employees,BMOprovidesabroadrangeofretailbanking,wealthmanagementandinvestmentbankingproductsandservicestomorethan12millioncustomers.

WeservemorethansevenmillioncustomersacrossCanadathroughourCanadianretailarm,BMOBankofMontreal.Wealsoservecustomersthroughourwealthmanagementbusinesses:BMONesbittBurns,BMOInvestorLine,BMOPrivateBanking,BMOGlobalAssetManagementandBMOInsurance.BMOCapitalMarkets,ourinvestmentandcorporatebankingandtradingproductsdivision,providesafullsuiteoffinancialproductsandservicestoNorthAmericanandinternationalclients.

IntheUnitedStates,BMOservescustomersthroughBMOHarrisBank,anintegratedfinancialservicesorganizationbasedintheU.S.Midwestwithmorethantwomillionretail,smallbusinessandcommercialcustomers.

BMOFinancialGroupconductsbusinessthroughthreeoperatinggroups:PersonalandCommercialBanking,WealthManagementandBMOCapitalMarkets.

FurtherInformation:www.bmo.com/home/about/banking/investor-relations/who-we-are

Our Vision

Tobethebankthatdefinesgreatcustomerexperience.

Our Guiding Principle

Weaimtodelivertop-tiertotalshareholderreturnandbalanceourcommitmentstofinancialperformance,ourcustomers,ouremployees,theenvironmentandthecommunitieswhereweliveandwork.

Our Strategic Priorities

1. Achieveindustry-leadingcustomerloyaltybydeliveringonourbrandpromise.2. Enhanceproductivitytodriveperformanceandshareholdervalue.3. LeverageourconsolidatedNorthAmericanplatformtodeliverqualityearningsgrowth.4. Expandstrategicallyinselectglobalmarketstocreatefuturegrowth.5. Ensureourstrengthinriskmanagementunderpinseverythingwedoforcustomers.

BMO Financial Group6 EconomicImpact

Economic Impact

Our Approach

Inadditiontofinancingopportunity,creatingwealthandmaximizingreturnstoourshareholders,wealsoplayanimportantroleinsustainingoveralleconomicprosperityforourclients,ouremployeesandourcommunities.Thewealthwecreateiswidelysharedthroughemployeecompensation,theprocurementofgoodsandservices,dividendspaidtoshareholders,supportforcharitableinitiativesandtaxes.

Shareholder Value

Revenueincreased$133millionin2013to$16,263million.Adjustedrevenueincreased$505millionor3%to$15,572million.TheincreasewasprimarilyduetorevenuegrowthinWealthManagement,BMOCapitalMarketsandCanadianPersonalandCommercialBanking,andcontinuestodemonstratethebenefitsofourdiversifiedbusinessmixandsuccessfulexecutionagainstourstrategicpriorities.

Employment

Weemployapproximately45,500peopleenterprise-wide,themajorityofwhomareinNorthAmerica.WehavearrangementsinCanadaandtheUnitedStatesthatprovidepensionandotheremployeefuturebenefits,includinghealthanddentalcarebenefitsandlifeinsuranceforcurrentandretiredemployees.Thebank’spensionplansaremanagedprudentlyandinaccordancewithallapplicablelawsandregulations.SeeNote23tothefinancialstatementsinthe2013 Annual Report.

Investment in Training

Weprovideemployeeswithopportunitiestogrowanddevelopthroughformaltrainingprogramsandon-the-jobexperience.In2013,ourinvestmentintrainingwas$91,113,439▲,whichisanaverageof$1,962perfull-timeequivalent(FTE)employee.Note:Averagetraininghoursperemployeehasnotbeendisclosedorassuredforthereportingyear.SeeIndicatorLA10onpage42forexplanation.

Taxes

Totalgovernmentleviesandtaxesin2013were$1,716million,Theseincludepayrolllevies,propertytaxes,provincialcapitaltaxes,businesstaxes,harmonizedsalestax,GSTandothersalestaxesandsundrytaxes.Forayear-over-yearbreakdownofgovernmentleviesandtaxes,seeTable8intheSupplementalInformationsectionofthe2013 Annual Report.

Purchasing Goods and Services

In2013,wepurchasedalmost$4billionworthofgoodsandservicesfrommorethan17,000suppliers.Ofthatamount,approximately$2.7billionwasspentthroughourCanadianoperationsandcloseto$1.3billionwasspentthroughourU.S.operations.Wealsoincurcoststooperateourbusiness.Totalpremisesandequipmentcostswere$1,877millionandincludedrentalofrealestatepremises,furnitureandfixtures,propertytaxes,computersandequipment.Forayear-over-yearbreakdown,seeTable8intheSupplementalInformationsectionofthe2013 Annual Report.

http://www.bmo.com/home/about/banking/investor-relations/annual-reports-proxy-circulars?nav=left



2013 Environmental, Social and Governance Report and Public Accountability Statement7 SocialImpact

Social Impact

Our Approach

AsoneofthelargestfinancialinstitutionsinNorthAmerica,wehavetheabilitytomakeapositivedifferenceinthelivesofourcustomersandourcommunities.Wedothisbyprovidingproductsandservicesthataretailoredtomeettheneedsofunderservedcommunitieslikeseniors,studentsandpeoplenewtothecountry.WealsoprovideaccesstofinancialservicesforAboriginalcommunitiesandbusinessesinCanada.

Access to Banking for Aboriginal Communities

Weoperate14BMObranches▲locatedonAboriginalreservelandorInuitterritoriesinCanada,providingAboriginalcommunitiesandbusinesseswiththetoolstheyneedtobecomeself-sufficient.WeareaparticipatinglenderforFirstNationsthatqualifyfortheFirstNationMarketHousingFund,establishedbytheGovernmentofCanadatogiveFirstNationsmembersgreateraccesstohousingloanson-reserveandonsettlementlands.

Support for Newcomers to Canada

AspartofourcommitmenttomakingiteasierfornewcomerstobuildanewlifeinCanada,we’vedesignedtheBMONewStartTMProgram,whichincludesafreebankingplanforoneyear,aspeciallydesignedmortgage,andtoolsthathelpnewcomerstoCanadagetestablishedfinancially.

Support for Small Business

OurOpenforBusinesscampaign,launchedin2012,madeupto$10billioninfinancingavailabletoCanadianbusinessesoverthreeyears,helpingthemimproveproductivityandexpandintonewmarkets.

Not-for-Profit Organizations

InCanada,weofferaCommunityaccounttolocalandnot-for-profitorganizations,includingsocieties,lodges,churchgroups,sportsandbusinessclubsandlocalchaptersofnationalnon-profitorganizations.

Theseinterest-bearingdepositaccountsprovide20transactionspermonthatnocharge,aswellasseverallower-costfeatures.

Furtherinformation:www.bmo.com/home/small-business/banking/accounts/choose/community-account

IntheUnitedStates,weofferacheckingproductwithnomonthlymaintenancefeetolocalandnot-for-profitorganizations.

2013 2012 2011

Community accounts(Canada) 64,136 63,285 62,090

Checking accounts (U.S.) 19,876 – –

Free/Discounted Accounts

Wealsoprovidethefollowingfree/discountedaccounts:

2013 2012 2011

Seniors (Canada) 1,019,970 1,007,666 985,378

Students (Canada)

(universityandhighschool) 470,349 399,798 112,990

Students (U.S.)*

(collegestudents) 50,966 – –

*Collegestudentsareprovidedwithafeewaiverthatisgoodforfouryears.

BMO and the Canadian Defence Community

BMOhasbeentheofficialbankoftheCanadiandefensecommunityforthepastfiveyears.InpartnershipwithCanadianDefenseCommunityBanking(CDCB),weofferproductsandservicesspecificallydesignedtomeettheneedsofmilitarymembersandveteransandtheirfamilies.Theprogramsavesmembersofthedefensecommunityapproximately$1millioninbankingfeeseveryyear.

http://www.bmo.com/home/small-business/banking/accounts/choose/community-account

BMO Financial Group8 ImpactInvesting

Impact Investing

Our Approach

Wegeneratemeasurablesocialandenvironmentalimpact,alongwithafinancialreturn,byseekingoutbusinessopportunitiesthatwillhaveapositiveimpactonourcommunitiesandcustomers,notjustourbottomline.Wehavereinvestedinourcommunitiesthroughaffordablehousingprojects,carbonoffsetcreditsandpersonalandcommercialloanstoAboriginalcommunitiesasdetailedbelow.

Community Development Financing for Aboriginal Communities in Canada

Wecontributetotheeconomicself-sufficiencyofAboriginalcommunities,businessesandindividualsacrossCanada.Annualbusinessrelatedtohomeloans,andcommercialloansanddepositsheldbyAboriginalcustomerswas$1.5billion▲atOctober31,2013.71communities▲participateinBMO’sOn-ReserveHousingLoanProgram,providingtheirmemberswithaccesstohousingloansfortheconstructionorpurchaseofowner-occupiedsinglefamilydwellingsortofinancemajorrenovationstoexistinghomes.

Community Development Loans and Investments in the United States

Wearecommittedtoenrichingthelivesoffamiliesandindividualsinthecommunitieswhereweoperate,particularlyinunderservedcommunities.WefollowtheguidanceandobjectivesoutlinedintheCommunityReinvestmentAct(CRA)tofulfillthiscommitment.Weareavaluedcommunityconnector,bringingtogetherthepublic,privateandnot-for-profitsectorstospuraffordablehousing,revitalization,economicdevelopmentandcommunityprojectswithlocalnot-for-profitpartners.Weaccomplishthisthroughourinvestments,lending,financialliteracyempowermentandserviceprograms.

Community Development Loans

During2013,BMOHarrisBankmadeUS$536.7millionincommunityinvestmentloanstosupporteconomicdevelopment,communityserviceandqualityaffordablehousing.Thispastyear,5,800low-tomoderate-incomefamiliesbenefitedfromthisinvestment.

Community Development Investments

BMOHarrishasprovidednewinvestmentcommitmentstotallingUS$178.9million,allowingustoputlargeramountsintoexistingrelationshipswhilealsofundingnewanduniqueprogramssuchaslow-incomehousingtaxcredits,privateequity/smallbusinessinvestmentcorporations(SBICs)andcommunitydevelopmentfinancialinstitutions.

Investment in the Greening Canada Fund

Wemadea$2millioninvestmentintheGreeningCanadaFundin2010,whichispartofa$10millioncommitmentoverfiveyears.TheGreeningCanadaFundisavoluntarycarbonemissionsreductionfundaimedatlargeCanadiancorporations.Thefundprovidesuswithaccesstohigh-qualityvoluntarycarbonoffsetcreditsandhelpsBMOsupportCanadian-basedemissionreductionprojects.Notonlydoesthisunderscoreourcommitmenttoenvironmentalsustainability,italsobenefitsorganizationsinthesocialandnot-for-profitsectors,suchasschoolboards,communityhousingandhospitals,aswellasprivatesectorprojects,suchaslandfillmethanegascaptureandbiomasspower.

2013 Environmental, Social and Governance Report and Public Accountability Statement9 SustainabilityIssuesThatMatterMost

Sustainability Issues That Matter MostDefining the Issues that Matter Most to BMO

ToidentifytheESGissuesthatmattermost,webeganwithBMO’svisionandourstrategicpriorities.Wethenconsideredcurrentandemergingissuesandassociatedrisksandopportunities,includingthoseraisedthroughstakeholderengagementactivities.Oncewehadcompiledalistofpotentialtopics,wenarroweditdowntothosethatweredeemedtobemostrelevant.BMO’sSustainabilityCouncil,amanagement-levelbodythatprovidesinsightandguidanceonthemanagementofESGissues,reviewed,prioritizedandapprovedthematerialissuesdiscussedinthisreport.

Thetablebelowpresentstheissuesthatmattermost.SeeourESGScorecardonpage20foryear-over-yearmetricsrelatedtotheseissues.

MaterialIssue

Whyisitimportant?

Whatarewedoingtoaddressit?

Trust Our business is built on trust. We follow high ethical standards to earn and keep the trust and respect of our colleagues and our stakeholders – including customers, suppliers, shareholders and the public.

Results of the 2013 Edelman Trust Barometer show that what a company does, as well as how it does it, are now both dependent upon trust and credibility. Running a profitable business and having top-rated leadership are no longer enough to build long-term trust. In fact, these operational-based attributes have become an expectation.

WeadheretoastrictcodeofbusinessconductandethicscalledFirstPrinciples.Thecode,whichisalignedwithourvalues,helpsguideustodotherightthinginourdailywork.

TheAuditandConductReviewCommitteeoftheboardreviewstheimplementationofFirstPrinciples,whichincludeswhistle-blowerproceduresforanonymouslyreportingnon-compliance.BMO’sOmbudsmanalsoreviewsconcernsraisedbyemployeeswhobelievethattheirFirstPrinciplesconcernshavenotbeenappropriatelyaddressed.

Eachyear,alldirectors,officersandemployeesmustsignanacknowledgementthattheyhaveread,understood,compliedandwillcontinuetocomplywithFirstPrinciples.

AFirstPrinciplescourseisincludedintheEthicsandLegalComplianceTrainingProgram.Thecourseisupdatedannuallytoaddressrecentdevelopmentsandemergingrisks.

Furtherinformation: Code of Conduct

http://www.bmo.com/home/about/banking/corporate-governance/about-us/code-of-conduct

BMO Financial Group10 SustainabilityIssuesThatMatterMost

MaterialIssue

Whyisitimportant?


Board Independence

The Board of Directors must be able to operate independently of management to maximize its effectiveness.

According to the 10 core principles outlined by the NYSE-sponsored Commission on Governance, investors (in all markets) rank board independence as the most important governance topic.

Tohelpmeettheobjectiveofamajority-independentboard,thebankadoptedDirectorIndependenceStandardsinMay2013fordeterminingwhetheradirectorisindependent.ThestandardsusecriteriafromthedefinitionofaffiliatedpersonsundertheBank Act(Canada)anddefinitionsofindependencefromtheCanadianSecuritiesAdministratorsandNYSE.

Theboardcurrentlyhas13members.Thereisoneexecutivedirector,WilliamA.Downe,ChiefExecutiveOfficer(CEO),and12independentdirectors.

Furtherinformation:www.bmo.com/home/about/banking/corporate-governance/select-documents

Customer Satisfaction

Achieving industry-leading customer loyalty by delivering on our brand promise is one of BMO’s strategic priorities.

Having loyal customers who recommend us to family and friends help us grow.

Measuring satisfaction provides valuable feedback that helps us build long-term customer loyalty. It also helps identify problems or systemic issues that need to be addressed.

Ourvisionistobethebankthatdefinesgreatcustomerexperience.Everyemployeekeepsthisvisionfrontandcentreineverythingtheydo.

NetPromoterScore(NPS)isBMO’skeyloyaltymetric.In2013,atotalof313,000retailcustomerinterviewswereconductedonBMO’sbehalf.Wecontinuedtorolloutandenhanceourcustomerloyaltymeasurementsystemacrossmostofourbusinesses.Simultaneously,anenterpriseNPSroadmapwasdevelopedanddistributedacrosstheorganization.TheroadmapdetailsthefuturestateoftheNPSsystemforBMO.ItclearlydefinestheobjectivesofrelationshipandtransactionalNPSmeasurement,alignswithindustrybestpracticesandensuresalignmentacrosstheorganization.Changestoourexistingcustomerloyaltyprogramsareplannedforfiscal2014.

http://www.bmo.com/home/about/banking/corporate-governance/select-documents

http://www.bmo.com/home/about/banking/corporate-governance/select-documents

2013 Environmental, Social and Governance Report and Public Accountability Statement

MaterialIssue

Whyisitimportant?


Products and Services that Meet Customers’ Needs

When our customers succeed, we succeed.

Our customers want us to provide the products and services they need in order to make better decisions and help them realize their financial goals.

Consistentwithourbrandpromise:Makingmoneymakesense,weaimtoremovecomplexityfromfinancialdecisionsandprovidecustomerswithsolutionsandadvicedesignedtomeettheirneeds.

We’vedevelopedpersonalbankingretailproductsfordifferentlifestages–forkids,teens,studentsandseniors–andsolutionsandresourcesforsmallbusinessandcommercialcustomers.

CustomerscontinuedtoenjoytheconvenienceofBMOMobileBankingastotaladoptionincreasedby60%andmobiletransactionsgrew81%overtheyearinCanada.Andnearly40%ofourcustomersintheUnitedStatesaccessedourmobilebankingplatform,whichwaslaunchedin2013.BMOMobileBankingisanimportantcomponentofBMO’smulti-channelstrategy.Fromautomatedbankingmachine(ABM)enhancementsandarefreshofouronlinebankinginterface,toimprovementsinbillpaymentfunctionalityandonlineappointmentbooking,alloftheseinitiativesareworkingtogethertomakebankingeasierandcreateabetterexperienceforourcustomers.

WeannouncednewagreementswithTheWesternUnionCompanyandAcxsysCorporation.TheagreementsallowBMOpersonalbankingcustomerstoconductonlineWesternUnionMoneyTransfertransactionsdirectlyfromtheiraccounts,viaAcxsysCorporation’sInterace-Transferplatform,toWesternUnion®AgentlocationsinCanadaandmorethan200countriesandterritoriesworldwide.

Theadvisorsinourwealthmanagementgroupdevelopanunderstandingoftheindividualneedsofeachclientinordertorecommendsolutionsthatbestmeettheirneeds.Ourpoliciesfocusonensuringtheinvestmentadvicewegiveourclientsandtheproductsandserviceswerecommendaresuitableandinlinewiththeirinvestmentobjectives.Wealsohaverigorouspoliciesandprocedurestoensurethatweconductaresponsiblelevelofresearch,analysisandapprovaloftheproductsandservicesweoffer.Additionalprocesseswereimplementedthisyeartoreviewthequalityofthefinancialplansthatweoffer,whichincludesoversightbyourCorporateAuditGroup.

InOctober2013,BMOInvestorLinelauncheditsfreemobileinvestingappforself-directedonlineinvestingclients.Theappoffersclientsgreateraccesstotheirportfolios,whileprovidingtheopportunityforon-the-godecision-making.

Furtherinformation:www.bmo.com/home

11 SustainabilityIssuesThatMatterMost

BMO Financial Group

MaterialIssue

Whyisitimportant?


Board Diversity Board diversity is linked to positive financial performance. Diversity of thought and perspectives creates opportunities for innovation.

WeintroducedanewBoardDiversityPolicyinMay2012,whichcommitsthebanktoaboardcompositioninwhicheachgendercomprisesnolessthanone-thirdoftheindependentdirectors.ToviewourBoardDiversityPolicygoto:www.bmo.com/home/about/banking/corporate-governance/select-documents

BMOisasignatoryoftheCatalystAccordandwearethusvoluntarilycommittedtoastrongrepresentationofwomenonourBoardofDirectors.Catalystisanorganizationdedicatedtoexpandingopportunitiesforworkingwomen,andBMO’searlyadoptionoftheCatalystAccordvalidatesthatourBoardofDirectorshadalreadyrecognizedandembracedtheimportanceofdiversity.

BMOsubmittedacommentlettertotheOntarioSecuritiesCommission(OSC)commendingitsproposedrulesthatwouldincreasethenumberofwomenoncorporateboardsandinseniormanagementofpubliccompaniesbymakinggenderdiversitypoliciesandpracticestransparent.Inparticular,BMOstateditssupportfortheOSC’sproposed“complyorexplain”approach.

Risk and Compliance

Aligned with our strategic priorities – BMO aims to ensure our strength in risk management underpins everything we do for our customers.

Unmanaged risks can have an effect on our reputation and can result in financial loss.

Risk Management

Asadiversifiedfinancialservicescompany,we’reexposedtoavarietyofrisksthataretypicalforourindustry.Weareguidedbyariskmanagementframeworkthatisembeddedinourdailybusinessactivitiesandplanningprocess.

TheEnterpriseRiskandPortfolioManagement(ERPM)groupdevelopsourriskappetite,policiesandlimits,andprovidesindependentreviewandoversightacrosstheenterpriseonrisk-relatedissuestoachieveprudentandmeasuredrisk-takingthatalignswithourbusinessstrategy.

TheRiskReviewCommitteeoftheBoardofDirectorsassiststheboardinfulfillingitsoversightresponsibilitiesinrelationtoBMO’sidentificationandmanagementofrisk,adherencetoriskmanagementcorporatepoliciesandprocedures,compliancewithrisk-relatedregulatoryrequirementsandevaluationoftheChiefRiskOfficer.

In2013,theboardapprovedanewCriminalRiskManagementCorporatePolicywhichoutlinestheframeworkreachingacrossallpartsoftheorganizationnecessarytoprevent,detect,respondtoandreportsuspectedcriminalactivity.

Furtherinformation:2013AnnualReport,pages75-99

Compliance

Wetakereasonablemeasurestocomplywiththelawsandregulationsofthejurisdictionsinwhichweconductbusiness.

TheComplianceGroupconductsindependentsecondlineofdefenceactivitiesacrosstheenterpriseunderthedirectionoftheChiefComplianceOfficer(CCO).Itisorganizationallyindependentofthegroupitoversees.

TheComplianceGroupisresponsibleforestablishingandoverseeingadherencetoenterprise-wideframeworksthatdefinethestandards,activitiesandresponsibilitiesforcomplyingwithregulatoryrequirementsandmanagingcompliance-relatedrisk.Itcarriesoutitsmandateusingarisk-basedapproachinalignmentwiththeEnterpriseandComplianceRiskAppetiteStatementsandBMO’sOperationalRiskManagementFramework.



MaterialIssue

Whyisitimportant?


(cont.) TogetherwiththeInstituteforLearningwithinHumanResources,theComplianceGroupisresponsiblefortheenterprise-wideEthicsandLegalComplianceTrainingProgram.Thismandatorytrainingconsistsofthefollowingcourses:

■ FirstPrinciples:OurCodeofBusinessConductandEthics

■ InformationSecurityandPrivacyMatters

■ Anti-Corruption

■ Anti-MoneyLaunderingandAnti-TerroristFinancing

■ HealthandSafety

■ AccessibilityandourCustomers

Atthebeginningoftheannualtrainingperiod,theCCOsendsanemailtoparticipantswithauniquelinktotheonlinetraining.Certainemployeesmustcompleteadditionaltraining,dependingontheirrole,thelineofbusiness,orwheretheyarelocated..

Complaint Resolution

Making it easy for customers to provide feedback is in our best interest. Complaints can identify problems that we can deal with in a timely manner. By taking complaints seriously and resolving them quickly, we build satisfaction and loyalty.

Weprovideopportunitiesforourcustomerstosharefeedbackinallourcustomer-facingchannels.

InCanada,ourcomplaintresolutionprocessisoutlinedinthebrochureWe Can Help – Resolving Customer Complaints,whichisavailableonlineandinallbranches.ItdescribesthecomplaintresolutionprocessforallofourCanadianoperatinggroups.

Asthefinalstepinourinternaldisputeresolutionprocess,BMO’sOmbudsman’sofficeisimpartialwhenreviewingcomplaintsfromcustomers.TheOmbudsmanreviewisgroundedinfairness,integrityandrespectandincludesconsiderationoftheinterestsofallparties,applicablelaws,policiesandindustrypractices.OutcomesmayincludearecommendationthatBMOcompensatethecustomer.CustomersalsohavetherighttobringtheirconcernstoBMO’sexternaldisputeresolutionprovider,theOmbudsmanforBankingServicesandInvestments(OBSI)forafurtherimpartial,informalandconfidentialreview.

BMO Ombudsman statistics 2013

Ombudsmanreviews(number) 117

Ombudsmanreviewsinfavourofcustomer(%) 27

IntheUnitedStates,welaunchedasinglesystemtocapture,trackandshareretailcustomercomplaintsandfeedbackinOctober2013.Notonlywillthissystemimproveourabilitytoidentifylegaland/orregulatoryissues,itwillgiveusabetterviewoftheretailcustomerexperience.Aspartofthelaunch,weheldvirtualclassroomtrainingsessionsforbankmanagersandrolledouteLearningtrainingandtoolkitstoemployees.

Weaskforfeedbackfromonlineretailbankingcustomersoncetheyhavecompletedatransaction.Wealsolookforonlinefeedbackfromthosewhovisitourwebsite.

Refertopage22forinformationonourannualemployeesurvey.

http://www.bmo.com/pdf/Complaint_Resolution_2012.pdf


MaterialIssue

Whyisitimportant?


Executive Compensation

Our ability to execute our strategic plans is dependent to a large extent on our ability to attract, develop and retain key executives.

Using incentive pay programs that link pay to performance, to shareholder value, and which encourage prudent risk-taking ensures that each executive’s goals are aligned with those of the organization and its key stakeholders.

BMO’scompensationpoliciesandstructuresupportourvisiontobethebankthatdefinesgreatcustomerexperience.Atthestartofeachyear,theboard’sHumanResourcesCommitteesetsoperatingtargetsthatreinforcethebank’sstrategicprioritiesandvalues.Atyearend,itassessesbankandoperatingperformanceagainstthesetargetstakingintoconsiderationinternalmeasuresofsuccessandourperformancerelativetoourpeers.IndividualperformanceagainstannualobjectivesfortheCEOandseniorexecutivesisalsoassessed,afterwhichtheallocationofincentiveawardsismadetotheCEOandseniorexecutives.

Furtherinformation:2014ProxyCircular,startingonpage52

Support for Local Communities

Helping to build and sustain resilient, vital and healthy communities is good for the economy and society as a whole.

By forming partnerships with third parties, we’re able to provide assistance in addressing societal issues like poverty.

Weprovidesupportthrough:

■ Donations

■ Employeegiving(volunteering)

Oursupportreflectsourvalues,hasapositiveimpactonthediversecommunitiesweserveand,ultimately,helpsbuildourbusiness.

Furtherinformation:LeadershipPriorities,pages27–28ofthisreportwww.bmo.com/corporateresponsibility

Talent Development

Having a talented, engaged and diverse workforce is a key priority for BMO.

Our bank can only be as strong as its people.

Clear job expectations attract individuals to jobs that best suit their abilities, and rewarding high-performing individuals helps support employee retention.

BMOhasfourkeytalentpriorities:

1. Build a talent mindset

Theimportanceofleaderswhocandemonstrateaneffectivetalentmindsethasneverbeengreater.Weholdleadersaccountableforattracting,hiring,assessinganddevelopingtalentedemployees.Theymustinspireourpeopleandhelpusbuildanenvironmentwhereeveryonecanperformattheirbest.

2. Engage our employees

Thereisastronglinkbetweenemployeeengagement,customerloyaltyandprofitability,andwewantemployeestobepassionateaboutworkinghere.Thisyear,weintroducedanewapproachtogatheringemployeeinsights,thatwillhelpdeepenourabilitytolisten,understandandactonwhatdrivesengagementforouremployees.

3. Provide opportunities to grow and develop

Wehavedevelopedeffectivemethodstoassessourneedsforskillsandexperienceandtofocusonplacingtherightpeopleintherightrolesacrosstheenterprisetomeetcustomers’needs.Weencourageemployeestogrowanddevelopthroughouttheircareer–throughbothformalprogramsandexperienceonthejob–andwemakesureleadersareequippedtothinkholisticallyaboutcoachinganddevelopingteammembers.

4. Create a diverse and inclusive work environment

WehaveadiversecustomerbasethatreliesonBMOtoprovidefinancialguidanceandknow-how.Totrulyunderstandandguideourcustomers,ourleadersandemployeesmustreflectthecommunitieswhereweliveandwork.DiversityandinclusionareanintegralpartofBMO’scorevalues,andareintegratedintoourtalentrecruitmentandretentionpractices.

http://www.bmo.com/home/about/banking/corporate-responsibility/home


MaterialIssue

Whyisitimportant?


Data Security Ensuring information security – being alert to external threats to the security of information entrusted to us – minimizes our risk.

Advances in technology with smartphones and tablets have created a new standard of access to real-time information. It’s important that we keep up with our clients’ needs while ensuring that confidential information is protected.

Online Banking

Oursecuresign-inprocessandstrongencryptionarethefirststepswetakeinprovidingasafeandsecureexperience.Wefullyreimbursecustomersforanylossestopersonalbankingaccountsasaresultofunauthorizedonlinebankingtransactions.In2013,webeganofferingafreedownloadofTrusteerRapportsoftwaretohelpprotectcustomersfromonlinefraudandidentitytheft.Inaddition,wepostedavideotitled”Don’ttaketherisk”onouronlinebankingportaltoprovidecustomerswithinformationonhowtoprotecttheirpersonalcomputers.Duringasix-weekperiodinthelatesummer,27,464customersviewedtheEnglishversionand4,744customersviewedtheFrenchversion.

International Cyber Security Awareness Month

DuringthemonthofOctober,weofferedourcustomersabrochureentitled“Howtoprotectyourselffrombecomingavictimofphishing”andaflyertohelpthemunderstandwhycybersecurityisimportanttoeveryone.Wealsosentoutseveraltweetswithlinkstoinformationonourwebsite.

Inaddition,communicationsweresenttoallBMOemployeeswithinformationaboutcyberthreats,anddetailsabouthowemployeescanhelpdefendthebankagainstcybercrime.AnewcybersecurityvideowasalsolaunchedfeaturinganinterviewwithBMO’sChiefInformationSecurityOfficerandapanelofexecutivesfromacrossthebank.

Security Training

“InformationSecurityandPrivacyMatters”ispartofourmandatory,enterprise-wideEthicsandLegalCompliancetrainingprogram.

Information Management

Wehavepoliciestoensuretheaccuracy,completenessandpropermaintenanceofrecords,dataandinformationweown,create,collect,useandmanage–inalltypesofmedia.



MaterialIssue

Whyisitimportant?


Responsible Banking and Investment

Our lending and investment activities can have environmental and social impacts, so who we choose to do business with is extremely important. It is BMO’s intent to avoid dealing with borrowers who have poor environmental and social risk management track records.

Wearecommittedtoensuringallproductsandservicesthatweoffermeetconsumerprotectionlawsandregulations,FirstPrinciples:ourcodeofconduct,andanyrelatedvoluntarycodesofconduct.

New Products and Services

PoliciesandproceduresfortheapprovalofnewormodifiedproductsandservicesarereviewedandapprovedbyCorporateSupportareas,includingRiskManagement,Finance,Legal,AuditandHumanResources,andotherseniormanagementcommittees,includingtheOperationalRiskCommitteeandReputationRiskManagementCommittee,dependingontheitem.SeeIndicatorFS15intheGRIIndexonpage47foradditionalinformation.

Ourcommerciallendersfollowguidelineswithrespecttothecriteriaforandmethodologyemployedintheassessmentofenvironmentalandsocialrisk.Theguidelinesidentifymorethan50industriesthatareconsideredenvironmentallysensitiveandthusrequireaheightenedlevelofscreening.

In2013,BMOimplementedESGtrainingforBMOCapitalMarketsemployeestoensurethatthereisconsistencyacrosstheenterpriseintheunderstandingofenvironmentalandsocialrisk.

Project Financing

InourassessmentofapplicationsforProjectFinancing,weapplyourinternalguidelines,whichincorporatetherequirementsoftheEquatorPrinciples–avoluntarycreditriskmanagementframeworkintendedtoensurethatprojectsaredevelopedinamannerthatissociallyresponsible–andreflectsoundenvironmentalmanagementpractices.

Furtherinformation:www.bmo.com/home/about/banking/corporate-responsibility/customers/responsible-lending#project_financing

Responsible Investment

BMO’sResponsibleInvestmentPolicyforourAssetManagementbusinessesoutlinesourcommitmenttoconsidermaterialESGinformationwhenmakinginvestmentdecisions.

Transparent Disclosure

A critical component of good governance is transparency.

WetakestepstoensurethatanypublicdisclosureofBMOinformationisfull,fair,timely,factual,accurate,understandable,objective,relevant,broadlydisseminatedandconsistentwithlegalrequirementsandBMO’sDisclosurePolicy.Alldevelopments,factsorchangesthatarematerialtousandourstakeholdersarecommunicatedthroughestablishedescalationprocesses.

Wemakeiteasierforanalyststoassessoursustainabilityperformancethroughtransparentdisclosure.Visibleresultsincludetherecognitionwe’vereceivedasasustainabilityleader,suchasbeingincludedintheGlobal100:MostSustainableCorporationsintheWorld,CorporateKnights’listofCanada’sBest50CorporateCitizensandMaclean’s/Sustainalytics’ Top 50 Socially Responsible Corporations.SeeAwardsandRecognitiononpage49forafulllistofsustainability-relatedawards.

TolearnmoreaboutBMOoraccessBMOcommunications,shareholderinformationandotherresources,visitInvestor Relations

http://www.bmo.com/home/about/banking/investor-relations/home


MaterialIssue

Whyisitimportant?


Employee Retention

Engaged employees care about our customers and the work we do as a company. They build relationships with our customers and deliver strong business results. They also have a positive impact on their team, and act as BMO brand advocates in the community and with external partners.

Retaining highly-engaged employees reduces the costs associated with hiring and training new employees, and maintains continuity in the relationships we build with customers.

Inourannualemployeesurvey,employeesconfirmed“opportunitiestogrow”and“strongleadership”askeydriversofengagement.Theyalsocareabouttheprogramsweoffer.

Wearecommittedtodevelopinggreatleadersacrossthecompanywhocandriveresults,identifyanddevelopthenextgenerationofleaders,andhelpallemployeesachievetheirverybestperformance.

In2013,weintroducednewprogramsandtoolstohelpemployeestakecontroloftheircareers,withsupportfromlocalleaders.Everycareerlooksdifferent,andweencourageemployeestocreateapathbasedontheirinterests,capabilitiesandgoals.TheycanbuildskillsforcurrentandfuturerolesthroughBMO’slearninganddevelopmentprograms,offeredtoemployeesatalllevels.

Weprovidecompetitivecompensation–aligningperformanceandpay,andofferingeveryemployeetheopportunitytoparticipateinthesuccessofthecompanythroughincentivepay.

Weofferarangeofbenefitsthatcanbetailoredtoemployees’needs.BMO’sbenefitsareavailabletofull-andpart-timeemployees(withlimitedbenefitsfortemporaryemployees).Ourbenefitsprogramsforemployeesandtheireligibledependentsincludehealthandinsurancecoverage,incomeprotection,retirement,savingsandwork/lifeeffectivenessprograms.

Morethan85%ofBMOemployeesparticipateinshareownershipplansthatencouragethemtojoinintheownershipofthecompanybybuyingBMOcommonsharesand/orincludingthemintheirretirementsavings.

Employeeshaveaccessto“BestofBMO”preferentialratesonbankingservices,personalusedealsandcorporatediscounts,tuitionassistance,andvolunteergrantsandamatchinggiftsprogramforcausesmostimportanttothem.

Furtherinformation:www.bmo.com/home/about/banking/corporate-responsibility/employees/work-life-effectiveness

http://www.bmo.com/home/about/banking/corporate-responsibility/employees/work-life-effectiveness

BMO Financial Group

MaterialIssue

Whyisitimportant?


Reducing BMO’s Environmental Impact

BMO is committed to the principles of sustainable development.

In 2008, we announced our plan to minimize the environmental impacts of our business operations, which included setting an enterprise-wide carbon neutrality goal.

Reducing energy consumption in our facilities, reducing business-related travel by employees and improving waste management practices also offer opportunities to reduce our operating costs.

BMOstrivestobealeaderinenvironmentalsustainability.Keytothisisidentifyingandaddressingtheenvironmentalimpactsofouroperationalfootprint.

We’vebuiltourenvironmentalsustainabilitystrategyaroundfivekeyBMOoperationalactivitiesthathavethepotentialtosignificantlyimpacttheenvironment:

BMO ECO5 Strategy:

1. Energyreductionandefficiency

2. Sustainabletransport

3. Sustainablematerials

4. Wastemanagement

5. Sustainableprocurement

Carbon Neutrality

BMOachievedenterprise-widecarbonneutralityinAugust2010.Wedidthisbyreducingemissionsrelatedtobusinesstravelbyemployeesandenergyuseinthebuildingsweoccupy;purchasingelectricityfromrenewableenergysources;andpurchasingcarboncreditstooffsettheremainingemissions.Althoughwe’vegrownourbusinesssubstantiallyintheUnitedStates,we’vemaintainedourcarbonneutralstatus.Oursecondtarget,setin2012,wastoreduceabsoluteenterprisecarbonemissionsby10%bytheendoffiscal2016.Wemetthatgoalaheadofschedulein2013,andwearenowintheprocessofestablishinganewtarget.Inaddition,weexpecttoidentifyanintensity-basedtargetforemissions,statedintermsoftonnesofCO

2equivalentperemployee.

Reducing Emissions

Wehavebeenveryfocusedonmakingourfacilitiesmoreefficientfromanenergyconsumptionperspective.Initiativesincludeindependentenergyaudits,lightingretrofits,equipmentinfrastructureupgrades,buildingautomationsystemsinretailfacilitiesandretro-commissioning.Toreduceemissionsrelatedtobusinesstravel,wehaveintroducedhybridvehiclestoourservicefleet(38%arehybrid)andcontinuetopromotetheuseoftechnologiessuchasvideoandteleconferencingtoreducecommercialairtravel.

Renewable Energy

Wearecommittedtoinvestinginrenewableelectricityforourfacilities.Therenewableenergycertificateswepurchasehelpstoreduceouremissions.In2013,wesignedathree-yeardealwithRenewableChoiceEnergyfortheannualpurchaseof91,400MWhofGreen-eCertifiedCleanSourceelectricityforourU.S.facilities.Thisrepresents52%oftheenergyweuseinourU.S.facilities.Wealsosignedathree-yeardealwithBullfrogPowerin2013for23,797MWhofelectricity.Attheendoffiscal2013,162ofourCanadianretailbrancheswerepoweredbyBullfrog.



MaterialIssue

Whyisitimportant?


(cont.)

Carbon Offsets

BMOisoneoftheinitialinvestorsintheGreeningCanadaFund(GCF).Thefundprovidesdirectaccesstohigh-qualitycarbonoffsetcreditsandhelpsBMOsupportCanadian-basedenergyefficiencyprojectsinpublicschools,hospitalsandcommunityhousing.OurinvestmentintheGCFisa$10million($2millionperyear)commitmentoverfiveyears.

Paper Target

In2012,wesetafive-yeargoal,basedona2011consumptionlevelof5,866tonnes,toreducepaperconsumptionacrosstheenterpriseby25%.InitiativeslikeprovidingeStatementsforcustomers,optimizinginternalprocessesandelectronicdeliveryofshareholdermaterials(e.g.,AnnualReportandManagementProxyCircular)willhelpusmeetthisgoal.Attheendoffiscalyear2012,wehadreducedconsumptionby4%fromthebaseyear.

What are our plans going forward?

■ Maintaincarbonneutrality

■ Establishanewabsoluteemissionsreductiontarget

■ FocusonreducingemissionsfromBMO-occupiedbuildingsandbusinesstravelbyemployees

■ Focusonunderstandingandimprovingourwastemanagementpracticeswithinourfacilities

■ InvestigateandmitigatetheimpactsofBMO’ssupplychainontheenvironment.


BMO Financial Group20 BMO’sESGScorecard

BMO’s ESG Scorecard Target 20131 20121 20111

Environmental

Renewable energy financing:

i. Involvement in equity and debt financings ($ billions) $1.8 $3.6 * ii. Lending commitments ($ billions) $1.7 $1.6 *

Operational footprint:

a. Renewable energy purchases (MWh)▲ New 3-year commitment 115,197 115,2132 115,2132

b. Scope 1 emissions (tCO2e) 10% reduction by 2016 TBD3 20,933 21,151

c. Scope 2 emissions (tCO2e) 10% reduction by 2016 TBD3 86,853 65,603

Social

Employees:

a. Diversity and Inclusion: i. Women executives – Canada & United States (%)▲ 40% by 2016 30 33 34 ii. Visible minority employees – Canada (% in senior and executive roles)▲ 25% by 2016 (N.A.) 22 21 20 iii. People of colour – United States (% in senior and executive roles)▲ Included in above target 7 7 8 iv. Persons with disabilities – Canada (% of total workforce)▲ 3.8% by 2016 2.8 2.5 2.4 v. Aboriginal employees – Canada (% of total workforce)▲ 1.5% by 2016 1.3 1.4 1.4

b. Employee Engagement Index (EEI)(%)▲ 785 75 76

c. Turnover rate: i. Canada (%)▲ 10.5 9.8 8.0 ii. United States (%)▲ 12.9 11.8 9.2

Community Investment:

a. Donations ($ millions)▲ 56.0 55.7 38.5

b. Community Development Loans United States (US$ millions) 536.7 – – c. Community Development Investments United States (US$ millions) 178.9 139.8 39.3

Governance

Board Diversity:

a. Women on Board of Directors (%) No less than 1/3 33 33 25

Business Conduct:

a. Ethics training (% completion)▲ 98.9 98.8 99.2 b. Significant fines/monetary sanctions for non-compliance4▲ none 0 0 * c. Incidents of discrimination (from external bodies)▲ 24 21 24

Legend:1 Fiscalyear(November1toOctober31) 2 Partofa3-yearcontract3 AvailableonlineinJune2014at:Environmental Performance 4 Afineisclassifiedas“significant”ifitisgreaterthan$500,000inmonetaryvalueanddeemed5 Newproviderandnewsurveyin2013 bytheexternalregulatorybodytorelatetounethicalbusinesspracticesbyBMO.– Notpubliclydisclosed ▲ 2013dataexternallyassured(KPMG’sAssuranceStatementisonpages53–54)* Beganreportingonthismetricin2012

Definitions for each indicator are listed in the

Glossary of Terms on pages 50–52

http://www.bmo.com/home/about/banking/corporate-responsibility/environment/environmental-performance


Stakeholder EngagementOur Approach

Wearecommittedtoworkingwithallofourstakeholders–tolisten,discussanddevelopanunderstandingoftheissuesthatareimportanttothem–andthentoactonthisunderstandingtoenhanceourbusinesspracticesasneeded.Thiscollaborativeapproachgivesusacompetitiveedgeandhelpsusachieveourvisiontobethebankthatdefinesgreatcustomerexperience.

BMO’sstakeholdersinclude:customers,employees,shareholders,governmentandregulators,industryassociations,Aboriginalcommunities,non-governmentalorganizations,not-for-profits,suppliersandresearchanalysts.

Thetablebelowpresentssomeofourstakeholderengagementactivities.

Howweengage

Keytopics/concerns

BMO’sresponse

Customers

Corporate Marketing’s Market Research Group works with third-party vendors who track our Personal and Commercial Banking and Wealth Management customers’ attitudes towards us and our major competitors via surveys.

The survey includes questions about customers’ experiences and problems to assess overall loyalty and the likelihood that they would recommend BMO to family and friends or business associates.

NetPromoterScore(NPS)isthekeyloyaltymeasureusedbyBMO.Surveyresultsarereportedandsharedwiththelinesofbusinessandusedinactionplanningtoimprovecustomerexperience.Withourcustomers’permission,branchmanagersattempttoreconnectwithcustomerswhorespondinthesurveythattheyhaveexperiencedaserviceproblemtofurtherdiscusstheirconcerns.

Customer focus groups within Wealth Management and Personal and Commercial Banking Groups are conducted regularly to obtain views on specific topics or for product development. Surveys are conducted online.

■ Saving for retirement

■ Paying for child’s education

■ Financial literacy

■ Holiday spending

TheBMOWealthInstituteprovidesinsightsandstrategiesaboutwealthplanningandfinancialdecisionstobetterpreparecustomersforaconfidentfinancialfuture.In2013,thefollowingquarterlyreportswerereleased:

1. Areyourbusinessandpersonalfinancesonsolidground?

2. Whatareyouleavingbehind?Familyconflictoramemorablelegacy?

3. Thebiggestlifeeventsthatcanderailyourfinancialplan

4. Studenttuitionanddebtontherise:RESPsandbeyond

Furtherinformation:www.bmo.com/home/personal/banking/investments/retirement-savings/retirement-planning/bmo-wealth-institute/featured

21 StakeholderEngagement

http://www.bmo.com/home/personal/banking/investments/retirement-savings/retirement-planning/bmo-wealth-institute/featured

BMO Financial Group

Howweengage

Keytopics/concerns

BMO’sresponse

Employees

Human Resources (HR) conducts an annual employee survey. This year, we worked with a new provider on developing a survey with a set of questions to generate results that will be easily measured against our peers as well as the world’s leading companies.

Greater emphasis is also being placed on action planning, measuring results and follow-through.

■ Employee engagement

■ Customer

■ Productivity

■ Leadership

■ Employee value proposition

38,080employeestookpartintheannualemployeesurveythisyear,aparticipationrateof82%.Thisratewas1percentagepointlowerthanlastyear’sparticipationrate.

■ 84%ofrespondentsidentifiedcustomersasatoppriority.

■ 81%ofrespondentsindicatedtheyhaveconfidenceinthefutureofBMO.

■ On70%ofsurveyquestions,BMOscoredatorabovestandardsetbytheworld’sleadingcompanies.

SeetheScorecardonpage20formetricsrelatedtothisissue.

Corporate Communications has a group of internal communication professionals who work with the various corporate areas and lines of business. They help leaders develop and deliver communications aligned with business strategies.

■ Corporate goals

■ Strategic priorities

Inadditiontocommunicatingthebank’sstrategicprioritiesandfinancialresults,theCEOalsosendsemailstokickoffcertainenterprise-wideinitiatives,suchastheannualemployeesurvey.

Managementwithinthelineofbusinessholdtownhallstoprovidetheirpeoplewithresultsandtargets.

Shareholders

Investor Relations communicates with shareholders/investors in a variety of ways, including:

■ Interim and full-year disclosure of financial results and business performance (e.g., Annual and Quarterly Reports, Management Proxy Circular, Annual Information Form)

■ Strategy, performance and other market updates throughout the year (e.g., investor days, investor conferences)

■ Annual General Meeting

■ News releases, corporate website and industry conferences.

■ Business and income growth outlook

■ Credit quality and outlook

■ Productivity

■ Capital deployment and return to shareholders

■ Canadian housing and consumer leverage

Note:Thesearecommonissuesforthebankingsector.

BMO’sBoardandmanagementsupportopendialogueandexchangeofideaswithshareholders.Ourshareholderengagementpolicyoutlineshowwecommunicatewithshareholders,andhowshareholderscancommunicatewiththeBoardorBMOmanagement.Toviewthepolicy,goto:www.bmo.com/home/about/banking/corporate-governance/select-documents

Shareholders,employeesandotherpartiesmaycommunicatedirectlywiththeBoardofDirectorsthroughtheChairmanoftheBoard.

Refertopage42ofthePCforthefulladdress.



Howweengage

Keytopics/concerns

BMO’sresponse

Government and Regulators

BMO’s Legal, Corporate and Compliance Group works closely with regulators. In Canada, our banking business is regulated federally under the Bank Act and the securities markets are currently regulated by the provinces.

■ Anti-corruption/fraud

■ Consumer protection

■ Deposits

■ Securities and derivatives

■ Insurance

Since2009,we’vetakenaconsistententerprise-wideapproachtotheincreasingnumberofregulatoryandlegislativechangesrelatedtoCanadiansecurities.Thisinvolvesconstantmonitoring,consultingwithinternalstakeholdersandmaintainingadatabaseofproposedchanges.Weparticipateinindustryassociationsandindustrycommentletters.Whenappropriate,wealsosubmitourowncommentletters.

BMO supports efforts to enhance the fairness and transparency of the electoral systems in the jurisdictions where we do business.

■ Public policy development

■ Lobbying

BMOlobbiesonlyaboutissuesthataffectourbusiness,andwereportallourlobbyingactivities.Thisensuresthatouractionsaretransparent,andthatweareaccountableforthem.

Industry Associations

BMO is a signatory to the Equator Principles.

The Equator Principles provides a voluntary credit risk management framework intended to ensure that projects are developed in a manner that is socially responsible and reflects sound environmental management practices.

Since2005,BMO’sEnvironmental,SocialandGovernanceGroup(ESGGroup)hasparticipatedinworkinggroupsthathaverevisedtheEquatorPrinciplestoreflectsignatories’experiencesandhavealsoincorporatedrevisionstotheInternationalFinanceCorporation’sPerformanceStandards,uponwhichtheseprinciplesare,inpart,based.

United Nations Environment Programme – Financial Institutions.

Understanding the impacts of environmental and social considerations on financial performance.

ThedirectorofBMO’sESGGroupisco-chairoftheUnitedNationsEnvironmentProgrammeFinanceInitiative’s(UNEPFI)NorthAmericanTaskForceandisalsoamemberofitsBankingCommissionBoard.UNEPFIisapartnershipbetweentheUnitedNationsEnvironmentProgrammeandtheglobalfinancialsector.UNEPFIworkswithover200financialinstitutionsthataresignatoriestotheUNEPFIStatementandarangeofpartnerorganizationstodevelopandpromotelinkagesbetweensustainabilityandfinancialperformance.

Participation in the revision of the ISO 14001 Environmental Management System standard.

ISO 14001 is currently undergoing its second revision to ensure that it remains relevant over the next two decades. The new version is expected to be published in 2015.

TheprogrammanagerofBMO’sEnvironmentalSustainabilityGroupwasselectedasoneoftwoenvironmentalmanagementsystemexpertstorepresentCanadaatthemeetingsofISO/TechnicalCommittee207EnvironmentalManagementmeetingsinBogota,ColombiainOctober2013.


BMO Financial Group

Howweengage

Keytopics/concerns

BMO’sresponse

Industry Associations (continued)

We are members of the Canadian Bankers Association (CBA), which works on behalf of domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada.

■ Regulatory and legislative changes OuraffiliationwiththeCBAensuresthatweareinvolvedinbankingregulationdiscussions.ItalsofacilitatesengagementwithCanadianregulators,governmentsandthepublic.

Aboriginal Communities

BMO supports the recruitment of talented individuals from the Aboriginal community. Our Enterprise Renewal Strategy includes the goal of increasing the number of Aboriginal employees in our workforce to 1.5% by 2016.

■ It’s important that our employees reflect the diversity of our customers

BMOofferstheRonJamiesonAboriginalScholarshipPrograminhonourofRonJamieson,aSixNationsMohawkandformerBMOexecutive.

Non-governmental organizations (NGOs)

We are committed to open dialogue with NGOs as their different perspectives are helpful as we work to understand an issue.

■ Human rights in the context of our lending activities

■ GHG impact of loans portfolios

■ Protecting the earth’s species

■ Conserving our oceans and fresh water

WeformpartnershipswithNGOswhentheyaremutuallybeneficial.

InNovember2012,BMO,WorldWildlifeFund(WWF)andtheAIRMILESRewardProgramlaunchedaco-brandedMasterCard,givingourcustomersaneasywaytosupportWWF’sconservationworkbysimplyusingthecard.

Not-for-profit organizations

Our Sponsorship Group has relationships with a number of not-for-profit organizations.

■ Economic support (for events and programs)

■ Enriching society

■ Celebrating heritage

WepartneredwiththeCanadianFoundationforEconomicEducationtodevelopafinancialliteracyprogram,thefirstphaselaunchedinJanuary2013–“TalkwithOurKidsAboutMoney.”

Sponsorships,inassociationwithnon-profits/organizationsliketheCalgaryStampede,BMOVancouverMarathonandtheCanadianSoccerAssociationnotonlyprovideuswithbrandexposure,theyhaveapositiveimpactonthecommunitiesweserve.

WeprovidesupporttoIndspire,anationalAboriginalnon-profitorganizationthatdistributesmorethan$6millioninscholarshipsandbursarieseachyear.


2013 Environmental, Social and Governance Report and Public Accountability Statement25 OurLeadershipPriorities

Our Leadership PrioritiesInthissectionweexplainourapproachtothreeofourleadershippriorities:creatingadiverseandinclusiveworkplace;providingeducationonthefundamentalsofmoneymanagement;andhelpingimprovethequalityoflifeinthecommunitieswhereweliveandwork.

Diversity

Our Approach

AtBMO,ourpeopleareourcompetitiveadvantage.Wearecommittedtolivingourvalue“EmbraceDiversity”becauseweknowthatadiverseandinclusiveworkplaceenablesemployeestoperformattheirbest.Asweequipouremployeestoembracediversity,ourinclusiveworkforcewilldeliverbetterperformanceandwewillbuildandsustainastronganddiversetalentpipeline.

Our Diversity Story

2012markedthe20thanniversaryofBMO’spioneeringTaskForcereports,whichestablishedacommitmenttocreatinganequitableworkplaceandtomaintainingBMO’spositionasaleaderindiversity.Tomarktheanniversary,BMOestablishedanenterpriseDiversityRenewalCouncil(DRC).SimonFish,ourGeneralCounsel,hasbeenappointedtheExecutiveDiversityChampionatBMO,andheandDanielaO’Leary-Gill,ourChiefCRAOfficer,co-chairtheDRC.TheDRC’sgoalistodriveperformancebybeingaleaderindiversity.UnderSimonFish’sleadership,anewEnterpriseRenewalStrategyhasbeendeveloped,outliningclearstepstoclosethegapbetweenBMO’sactionsandwhatitvalues.TheEnterpriseRenewalStrategyincludesthefollowinggoalswhicharetobeachievedbytheendof2016:

■ 40%womenexecutives

■ 3.8%personswithdisabilities

■ 1.5%Aboriginalemployees

■ Increaseinminoritiesinseniorroles

■ Strengthenedpipelineofdiverseemergingleaders

Enhancing Inclusive Leadership

Webelievethatinclusiveleadersarevitaltosustainingandacceleratingourprogresstowardourdiversityandinclusiongoals.Overthepastyear,we’vemadeaconcertedefforttoenhanceinclusiveleadershipbydevelopingtheculturalintelligence(CQ)capabilitiesofourleaders.CQisameasureofone’sability,capacityandwillingnesstoidentifyandacknowledgedifferences.It’saboutseeingpeoplebeyondtheirgender,culture,ethnicityorrace,andbeyondtheirdisability.Culturalintelligenceisimportanttothebankbecausetheself-awarenessitpromotesenablesourpeopletodeveloptheinclusiveleadershipcapabilitiesthatarenecessarytoliveourvalue“EmbraceDiversity.”

Herearesomeofthewayswe’vebuiltCQcapabilitythisyear:

■ 50topseniorleadersreceivedtrainingon“culturalblindspots.”“Culturalblindspots”arehiddenbiasesbasedonbitsofpastexperiencethatinfluenceourbehaviourtowardmembersofparticulargroups,thoughweremainoblivioustotheirinfluence.Thistrainingwillaffecthowleadersmakedecisionsaboutwhotheyhire,develop,rewardandpromote.

■ Morethan150leaderscompletedInterculturalDevelopmentInventory(IDI)toassesstheirattitudestowarddifferenceandreceivedtargetedactionplanstoimprovetheirabilitytoworkacrossdifference.

■ WeembeddedCQawarenessinemployeeorientationprogramsandeLearningprograms.

In2014,200leaderswillbeprovidedwithCQtraining.Similartraining–NavigatingCultures–willbeprovidedmorebroadlytoallotheremployeesthroughoureLearningtool.ThetrainingwillshowcasestoriesofBMOleaderswhoarehoningtheirCQ,alongwithtipsanddiscussionboardsforemployeestosharetheirinsights,storiesandquestions.

BMO Financial Group26 OurLeadershipPriorities

Count Me In

“Countmein!”isanenterprise-wideawarenesscampaignfortheinclusionofpeoplewithvisibleandnon-visibledisabilitiesinourworkplace.Thiswillensurethatthenumberswearereportingareaccurate.Tohelpsupportourgoalofincreasingthenumberofemployeeswithdisabilitiesto3.8%bytheendof2016,wealsolaunchedour“Manager’sguidetohiringandleadingemployeeswithdisabilitiestoolkit.”

Advancing Diversity and Inclusion in the Workplace and the Legal Profession

BMO’sLegal,Corporate&ComplianceGroup(LCCG)hasembeddeddiversityprinciplesanddiversitybestpracticesinitsRecruitmentGuideandInterviewingToolkitforinternalandexternalrecruiters,whichincludesarepresentationgoalof25%fromadesignatedgroup.Inaddition,LCCGisdrivingperformancewithitslegalsuppliersbyincorporatingdiversitymetricsintherequestforproposal(RFP)processforoutsidecounsel,andrequestingdiversitystatisticstohelpensurethatourlegalsuppliersareconsistentwiththediversityofourorganizationandreflectthecommunitiesinwhichwedobusiness.We’vereceivedcommitmentsfromanumberoflawfirmswhichinthepasthavenotprovidedmetrics,thattheywillinstituteaformalizedprocessinthecomingyear.

Capital Markets Mentorship Program

OneofthegoalsoftheBMOCapitalMarketsMentorshipProgramistofacilitatematchesthatmightnototherwiseoccur.Byteachingandlearningfromothersoutsideofourprofessionalcircles,wehaveanopportunitytogaindifferentperspectivesandknowledge.Thisenrichmentpositionsustodeliveranevengreaterclientexperience.

Dedicated Requisitions Program for Persons with Disabilities and Aboriginal People

Throughthisprogram,jobpostingsdesignedtoaddressuniquegapsandsustainadiverseworkforceprovidecareeropportunitiesavailableonlytopersonswhoidentifyasbelongingtospecificdiversegroups.

See Awards and Recognition onpage49fordiversity-relatedrecognition.

Financial Literacy

Our Approach

Wearecommittedtoprovidingeducationonthefundamentalsofmoneymanagementandtobuildingthefinancialcapabilitiesofourcustomers,whichultimatelymakesourcommunitiesstronger.Wewanttobeknownasthebankthatmakesourcustomersfeelconfidentabouttheirfinances.Ourthreetargetedgroupsare:employees,customersandthecommunitieswhereweoperate.

Ourfocusin2013hasbeenon:

■ DevelopingafactbaseaboutthefinancialliteracyofBMO’semployeesandlaunchinganEmployeeFinancialEducationProgram

■ Launchingthe“TalkWithOurKidsAboutMoney”programtobenefitourclientsandthecommunitieswhereweoperate.

Employee Financial Education Program

TheFinancialLiteracySurveyconductedin2012,shednewinsightsonouremployees’understandingofandcomfortwithfinancialconcepts.Overall,BMOemployeesaremorefinanciallyastutethanthegeneralpopulation–withhighscoresforknowledge,behavioursandattitudesthatexceedthoseforadultsinCanada,theUnitedStatesandelsewherearoundtheworld.However,someemployeesegmentsarestrongerthanothers.

InOctober,theBMOInstituteforLearninglaunchedanonlineemployeefinancialeducationprogramtostrengthenemployeefinancialcapabilitiesanddeepenawarenessoffinancialmattersrelevanttotheirfinancialwell-being.Inordertoputemployeesonthepathtoclarity,confidenceandcontroloftheirfinancialmatters,theprogramfocusesonsettinggoals,learningandtakingaction.Byconnectingwiththisdigitalexperienceinanunintimidating,non-judgmentalway,employeescanexplorethesiteandaremotivatedtokeepcomingback.Tofacilitatefinancialempowerment,thesitehasleveragedsomekeyselementsofbehaviouralpsychologybyincorporatingthreekeyengagementpillarsintothesiteexperience:personalization,collaborationandgamificationprinciples.

Thesiteisbeinglaunchedinmultiplephases,beginningwithCashFlowandBudgetingasthefoundationforbuildinglong-termpositivefinancialbehaviours.InadditiontoofferingthesiteinEnglishandFrenchinCanada,wehavecreatedaU.S.versiontoensurethatresourcesarerelevant.

Talk With Our Kids About Money

ThefirstannualTalkWithOurKidsAboutMoney(TWOKAM)daywasApril17,2013.TheTWOKAMwebsitesupportstheParentProgramandSchoolProgram,aswellastheLet’sTalkAboutMoneyRESPContest.Theprogramsucceededinreachingover400schoolsinOntario,QuebecandotherprovincesacrossCanada.Drawinguponandbringingtogetheranumberofongoingmediapromotions,agrowingsocialmediapresenceandtheregistrationofparents/guardiansandeducatorsonthewebsite,anestimated65,000students/childrenacrossthecountryhadexposuretohelpfulresourcesandlessonsonfinancialliteracy.Followingthesuccessofthe2013pilot,weareexpandingtheprogramin2014totherestofOntarioandQuebec,ManitobaandSaskatchewan.AU.S.pilotisscheduledforChicagoandMilwaukee.

Supporting Employees who Provide Financial Literacy Outreach

BMOHarrisBank’sFinancialLiteracyResourceCenter,developedin2012,provideswebinarsonbestteachingpractices,informationaboutupcomingeventsandadirectoryofemployeefacilitatorsforemployeeswhodevelopcommunityseminarsandotheroutreachinitiatives.

Financial Literacy tools

Weprovideawiderangeofcomplimentarytoolsdesignedtohelpcustomersgetabetterunderstandingoftheircurrentfinancesandtheadvantagesoffutureplanning.Visitourwebsiteforalistofprograms:Financial Literacy

http://www.bmo.com/home/about/banking/corporate-responsibility/customers/financial-literacy

2013 Environmental, Social and Governance Report and Public Accountability Statement27 OurLeadershipPriorities

Contributing to Communities through Corporate Donations, Sponsorships and Employee Giving

Corporate Donations

Our Approach

BMOiscommittedtohelpingimprovethequalityoflifeinthecommunitieswhereweliveandwork.Itspartofalong-standingtraditiondatingbacktoourfirstdonationtoahospitalin1835.Webelieveinthepossibilitiesofpersonalgrowthandachievementthroughcontinuouslearningandaccesstoeducation.Wefocusourcontributionsoverabroadrangeofinitiatives,including:

■ Education

■ Hospitals,HealthandResearch

■ CivicandCommunityServices

■ ArtsandCulture

In2013,wecontributedmorethan$56milliontonon-profitorganizationsacrossNorthAmerica.We’vehighlightedafewbelow:

■ BMOCapitalMarketsdonated$1.1milliontoeightcharitiesacrossNorthAmericathroughitsEquityThroughEducation(ETE)charitableprogram.Thistranslatesintoassistanceformorethan2,500studentsthroughscholarships,bursaries,mentoringprogramsandjobsearchstrategyforums.Sincethelaunchofthisinitiativein2005,ETEhasraised$13.4millionasasetportionofoneday’sinstitutionalequitytradingcommissionsearnedinNorthAmerica.Inaddition,BMOCapitalMarketshashiredsevenETEscholars,fourinTorontoandthreeinNewYork.Furtherinformation:www.bmocm.com/aboutus/community/equitythrougheducation/

■ BMOHarrisBankmadea$5milliondonationtoRushUniversityMedicalCentre,toexpandauniquemodelofcarethateducatesandtrainsstudentsfornewhealthcarejobsneededtodeliverhigh-quality,coordinatedhealthcaretoChicago’sunderservedandlow-incomeWestandSouthSidecommunities.ThefundingwillstrengthenandaccelerateexistinghealthcarepartnershipsamongRush,theMedicalHomeNetworkandCityCollegesofChicago,creatingnew,sustainablemodelsofcarethroughnumerousprograms.

■ BMOmadea$1.25milliondonationtosupportbiomaterialresearchattheUniversityofGuelph,inafocusedefforttosustainandgrowtheagriculturalbio-economy.ThisdonationwasdirectedtotheBetterPlanetProject,theUniversity’s$200-millionfundraisingcampaigninsupportofteachingandresearchinfood,environment,healthandcommunities.TheUniversitywillnamePhaseIIoftheBioproductsDiscoveryandDevelopmentCentre,nownearingcompletion,astheBMOBioproductsInnovationExtension.

■ BMOmadea$2.5milliondonationtotheUniversityofWindsortohelpfundthenewEdLumleyCentreforEngineeringInnovation,namedaftertheBMOCapitalMarketsVice-ChairandUniversityofWindsorChancellor,HonourableEdLumley,PC.ThefacilityfeaturestheBMOCollaborativeLearningForum,a350-seatflexibleclassroomwithstate-of-the-artaudioandvideotechnologythatsetsanewbenchmarkfortheteachingandlearningexperience.

■ BMOmadea$1.25milliondonationtoMountRoyalUniversityinCalgary,tofundscholarships,bursariesandapeermentorshipprogramforAboriginalstudentsoverthenextsevenyears.Thisfundingwillhelpestablishafirst-of-its-kindawardsprogramatMountRoyalbyprovidingcomprehensivefinancialandculturalsupporttoAboriginalstudentsateverystageoftheireducationaljourney.Withtheadditionof20newscholarshipsandbursariesthroughtheBMOFinancialGroupAboriginalStudentFund,aswellasauniquepeermentorshipprogram,BMO’sdonationwillsupporttheworkofIniskimCentre–MountRoyal’sacademicandculturalsupportcentreforAboriginalstudents.

■ AUS$750,000donationoverthreeyearstotheUnitedWayofGreaterMilwaukeetopromotehealthybirthoutcomesandreducethecity’sinfantmortalityrate.MilwaukeehasoneofthehighestinfantmortalityratesamonglargeU.S.citiesandoneofthemostpronouncedracialdisparitiesininfantdeaths:AfricanAmericaninfantsaretwotothreetimesmorelikelytodieintheirfirstyearoflifethanCaucasianinfants.TheHealthyBirthInitiativehassetagoaltoreduceMilwaukee’sAfricanAmericaninfantmortalityrateby15%andtheoverallrateby10%by2017.

■ ThroughtheRonJamiesonAboriginalScholarshipProgram,wesupportAboriginalstudentsaspiringtoworkforatopfinancialinstitutioninCanada.Formoreinformationand/ortoapplyforthisuniquescholarshipopportunity,pleasevisitIndspire.ca.

■ BMOFinancialGroupcontributestotheFoundationfortheAdvancementofAboriginalYouth(FAAY)toencourageyoungAboriginalpeopletostayinschoolandpursuehighereducation.FAAYsupportstheaspirationsofyoungpeoplewhowillcontributetothefutureeconomicandsocialdevelopmentoftheircommunitiesbyofferingthemtheopportunitytodevelopskillsandtraining.ThroughtheFoundation,BMObursariesof$750areawardedannuallytostudents13to18yearsoldingradenineandabove.

Additionalinformation:2013 Corporate Responsibility Report

Sponsorships

Our Approach

Sponsorshipsplayanimportantroleinouroverallmarketingstrategy.Theyprovideuswithvaluableopportunitiestoraisetheprofileofourbrandandourimageinthecommunity.Sportssponsorshipsinparticularallowustoconnectwithaudiencesandtoconnectaudiencestoourbrand.

TheSponsorshipMarketingCouncilofCanadarecognizedBMOwithtwoSponsorshipMarketingAwardsinApril2013.BMOreceivedaGoldAwardforSustainedSuccessforitsLocalSoccerClubsprogram.TheprogramwasrecognizedforbeingBMO-ownedandlocallydriven,andforitssponsorshipofmorethan1,000localyouthsoccerteamsacrossCanada.IntheSpecialInterestCategory,BMOtookhomeanAwardofDistinctionforourmorethan100-yearpartnershipastheofficialbankandchampionsponsoroftheCalgaryStampede.

Herearesomehighlightsfromthepastyear:

■ BMOcontinuestosponsorsocceratalllevels,fromprofessionaltograssroots.WecontinuedtopromoteBMO’sTeamoftheWeek

http://www.bmo.com/home/about/banking/corporate-responsibility/our-approach/reporting#cr

https://indspire.ca/

http://www.bmocm.com/aboutus/community/equitythrougheducation/

BMO Financial Group

programforthethirdyear.TheMonteuilSpartaU10girls’teamfromLaval,QuebecwasselectedastheBMOTeamoftheWeek2013Champion.Thetitlecomeswitha$125,000prizetowardafieldrefurbishment,a$5,000donationtoacharityoftheteam’schoice,andatriptoseeaTorontoFC,MontrealImpact,VancouverWhitecapsorCanadiannationalteamhomegame.

■ InJuly2013,BMOandrenownedQueen’sUniversityyouthsportexpert,Dr.JeanCôté,releasedareporttitled“TheCoach’sRoleinCreatingaPositiveEnvironmentinYouthSoccer”.Inthereport,Dr.Côtéproposesthatcoachingismorethanteachingskillsordeliveringspecificcontent.Ifyouthsoccercoachesbuildsupportiverelationshipswiththeirplayersthatareguidedbysolidmoralvalues,theywillcreateanenvironmentthatempowersyoungpeoplebeyondthesoccerfield.Dr.Côté’sreportlooksatthefourpillarsofapositiveenvironmentinsport–teampride,spirit,communitycommitmentandpassionforthegame–whichareatthecoreofBMO’sTeamoftheWeeksoccerprogram.

■ InOctober2013,theTorontoRaptorsandBMOannouncedamulti-yearpartnershipthatwillseethebankjoinCanada’sNBAteamastitlesponsorandserveastheofficialbankoftheRaptors.Theagreementbuildsonalong-timepartnershipbetweenBMOandMapleLeafSports&Entertainment.AsanewplatinumpartneroftheRaptors,BMOwillhaveastrongin-arenapresence,includingBMObrandingonthebasketballcourt,andonbroadcastsforRaptorsgames.BMOandtheRaptorswillteamuptooffernewproductstocustomers,andatthegrassrootsleveltheyplantointroducecommunitybasketballprogramssimilartothosedeliveredatBMOFieldwithTorontoFCandotherBMOyouthsoccerprogramsacrossCanada.

■ InChicago,BMOHarrisBankisasponsoroftheChicagoBlackhawks.Together,theypresentYouthHockeyAwardstovolunteer,playersandcoacheswhohavegoneaboveandbeyondtheirdutieswithon-icerecognitionatselectBlackhawksgameseachseason.WearealsotheofficialbankoftheChicagoBulls.Duringthisunifiedpartnership,we’velaunchednumerousprograms,suchasAdopt-A-SchoolandMilitaryMoments,whichrecognizesVeteransduringon-courtpresentationsatselectgameseachseason.

■ In2013,webecameaproudsponsoroftheSt.LouisBlues.Inadditiontoofferingcustomerdiscounts,theBMOHarrisKid’sCaptainProgramprovidesaonce-in-a-lifetimeexperienceforayoungplayertojointheBluesontheiceduringthenationalanthemateveryhomegame.InMilwaukee,wecontinuetosponsortheMilwaukeeBucks.BMO,incollaborationwiththeBuckscreatedtheBMOCommunitySeatsprogramwheretwelveseatsaredonatedtolocalyouth-orientedorganizationsforeachhomegame.TheprogramwasinstitutedtogiveunderservedyouthanopportunitytoexperiencealiveNBAgame.

Employee Giving

Our Approach

Weprovideemployeeswiththeopportunitytoparticipateinawiderangeofcommunitybuildingactivities,includingtheopportunitytovolunteerduringbusinesshours.Beyondthebenefitstoourcommunities,oursupportforemployees’effortshasapositiveimpactonourorganization.Throughvolunteerwork,employeesgainopportunitiesforpersonalgrowth,developingstrengthinleadership,team-buildingandcreativethinking.Thesepositiveexperiencesboostworkplacemoraleandhelpdeepenengagement.

Supporting our Employees’ Personal Contributions

InCanada,wecontributed$447,000tocharitiesandnot-for-profitorganizationssupportedbyBMOemployees,throughtheVolunteerGrantsProgram.Wealsomatched$300,291indonationsmadebyemployees,pensionersanddirectorsinNorthAmericathroughourMatchingGiftProgramforHigherEducation.

Helping Others

InMay,BMOemployeesandtheirfamiliesandfriendsacrossCanadatooktothestreetstoparticipateinthebank’sinauguralfundraisingwalkinsupportofKidsHelpPhone.Morethan3,000employeesin33communitiesacrossCanadaraisedalmost$650,000tohelpensurekidsfrombigcities,smalltownsandremotecommunitiescanreachouttoaKidsHelpPhoneprofessionalcounsellorbyphone,online,dayornight,inEnglishandinFrench.Inaddition,theBMOEmployeeCharitableFoundationdonated$250,000toKidsHelpPhone.

BMO Volunteer Day

June5,2013wasBMOVolunteerDayacrossNorthAmerica.Morethan6,000BMOemployeesvolunteeredduringregularbusinesshoursatlocalcharitableagenciesincommunitiesacrossNorthAmerica.Buildingonwhat’sbecomeatraditionintheUnitedStates,thiseventunitesemployeesacrossborderswithacommongoal:toworktogethertohelpeventheoddsandimprovethelivesofthepeopleinourcommunities.

2013 Employee Giving Campaign

Throughourcharitablefoundation,39,00employees–morethan84%–participatedinthe2013campaignanddirectedmorethan$15milliontolocalUnitedWayorganizationsandothercharitiesacrossNorthAmerica.

Mentorship Programs

LCCGemployeesinTorontoandChicagoactedasmentorsforstudentsinpriorityneighbourhoodsthroughtheLAWS(LawinActionWithinSchools)andWorkinginSchools(WITS)programs.

28 OurLeadershipPriorities

2013 Environmental, Social and Governance Report and Public Accountability Statement29 GRIIndex:ProfileDisclosures

GRI Index

GRIIndicator

Description

ReportReferenceorCommentary

Strategy and Analysis

1.1 Statement from the most senior decision-maker of the organization (e.g. CEO, chair or equivalent senior position) about the relevance of sustainability to the organization and its strategy.

Seepage3ofthisreport:MessagefromtheChair,BMOSustainabilityCouncil

1.2 Description of key impacts, risks and opportunities. ForESGrelatedrisks,seetheReputationRiskandEnvironmentalandSocialRisksectionsonpage99oftheAR.

Organizational Profile

2.1 Name of the organization. BankofMontreal

2.2 Primary brands, products, and/or services. BankofMontrealusesaunifiedbrandingapproachthatlinkstheorganization’smembercompaniesunderthebrand“BMOFinancialGroup”.Assuch,inthisreport,thenamesBMOandBMOFinancialGroupmeanBankofMontrealtogetherwithitssubsidiaries.

Furtherinformation:ARpages3,27and174–176

2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures.

Informationabouttheinter-corporaterelationshipsamongBankofMontrealanditsprincipalsubsidiariesisprovidedonpage189oftheAR.

Furtherinformation:ARpages174–176

2.4 Location of organization’s headquarters. BMO’sheadofficeislocatedat129rueSaint-Jacques,Montreal,Quebec,H2Y1L6,anditsexecutiveofficesarelocatedat100KingStreetWest,1FirstCanadianPlace,Toronto,Ontario,M5X1A1.

Profile Disclosures

LegendAIF – Annual Information Form for the year ended October 31, 2013AR – BMO Financial Group’s 196th Annual Report 2013ESG Report and PAS – Environmental, Social and Governance Report and Public Accountability StatementPC – Notice of Annual Meeting of Shareholders and Management Proxy Circular – February 7, 2014

BMO Financial Group30 GRIIndex:ProfileDisclosures

GRIIndicator

Description


Organization Profile continued

2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

Weoperateinanumberofcountries,butthescopeofourESGReportisCanadaandtheUnitedStates,alsoreferredtoasBMO’sNorthAmericanoperations.

Furtherinformation:ARpages174–176and189

2.6 Nature of ownership and legal form. BankofMontrealisaCanadianScheduleIbankandpubliccompanylistedontheTorontoandNewYorkstockexchanges.Sharesarewidelyheldbyinstitutionalandretailowners.

Furtherinformation:ARpage189

2.7 Markets served (including geographic breakdown, sectors served and types of customers/beneficiaries).

ARpages174–176

2.8 Scale of the reporting organization. RefertoWhoWeAreonpage5ofthisreport.

Furtherinformation:ARpages3,27and174–176

2.9 Significant changes during the reporting period regarding size, structure or ownership.

ARpages28-29,37and155-156

2.10 Awards received in the reporting period. Awards and Recognition

Report Parameters

3.1 Reporting period (e.g. fiscal/calendar year) for information provided.

OurAIF,AR,PCandESGReportandPAScoverour2013fiscalyear(November1,2012toOctober31,2013).

3.2 Date of most recent previous report. 2012Environmental,SocialandGovernanceReportandPublicAccountabilityStatement

3.3 Reporting cycle (annual, biennial, etc.). Ourreportingcycleisannual.

3.4 Contact point for questions regarding the report or its contents.

EmailaddressforquestionsaboutourESGactivitiesandperformance:[email protected]

3.5 Process for defining report content. RefertoSustainabilityIssuesThatMatterMostonpages9–19ofthisreport.

http://www.bmo.com/awards


GRIIndicator

Description


Report Parameters continued

3.6 Boundary of the report (e.g. countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers).

ReferencesandcommentaryinthisreportrepresentourNorthAmericanoperations,unlessotherwisestated.

3.7 State any specific limitations on the scope or boundary of the report.

None.

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations.

ARpages34,37,130–133,145–147and155–156

Wecalculatethecarbonfootprint(relativetoenergyuseinourbuildingsandtravelbyemployeesforbusinesspurposes)forjointventures(equityshareportion),subsidiariesandleasedfacilities,butnotforoutsourcedoperations,fortheentirefiscalyear.Alsoincludedinourcalculationsaretheimpactsofanyacquisitionsfromthetransactiondatetothefiscalyear-enddate.

3.9 Data measurement techniques and the basis of calculations, including assumptions and techniques underlying estimations applied to the compilation of the indicators and other information in the report.

Informationondatameasurement,calculationsandassumptionsarelistedintheGlossaryofTermsonpages50–52ofthisreport.Environmentaldatameasurementtechniquesareoutlinedonourwebsitealongwiththeperformanceresults.

3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g. mergers/acquisitions, change of base years/periods, nature of business, measurement methods).

RefertoEnvironmental Performancefordetailsonchangestoenvironmentaldata.

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

Therearenosignificantchangesfromthepreviousreportingperiod(fiscal2012)inthescope,boundaryormeasurementmethodsappliedinthereport.Forathree-yearhistoryofthedevelopmentofthebusiness,seepage4oftheAIF.

3.12 Table identifying the location of the Standard Disclosures in the report.

2013ESGReportandPAS

3.13 Policy and current practice with regard to seeking external assurance for the report. If not included in the assurance report accompanying the sustainability report, explain the scope and basis of any external assurance provided. Also explain the relationship between the reporting organization and the assurance provider(s).

KPMGactsasBMO’sShareholders’auditor,andwasengagedin2013forthesecondyeartoprovidelimitedassuranceonselectedsustainabilityinformationintheESGReportandPAS.KPMG’sfinancialstatementauditreportcanbefoundonpages123and124ofthe2013ARandtheirlimitedassurancereportonselectedperformanceindicatorscanbefoundonpages53–54ofthisreport.

KPMGisindependentofBMOwithinthemeaningoftheRulesofProfessionalConduct/CodeofEthicsofvariousCanadianprovincialprofessionalaccountingbodiesandtheUnited States Securities Act of 1933andtheapplicablerulesandregulationsthereunder.(Seecommentsonpage2ofthisreport.)



GRIIndicator

Description


Governance, Commitments and Engagement

4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

TheESGTeamisaccountableforidentifyingandunderstandingcurrentandemergingESGissuesthatmayhaveanimpactonourstakeholdersandinturnourbusiness.TheESGTeamcollaborateswithvariousareasofthebanktoaddressthoseissues,andisresponsibleforESGtraining.

BMO’sSustainabilityCounciliscomprisedofseniorleadersfromacrossthebankandprovidesguidanceandoversightonsignificantsustainabilitymatters.Thecouncilmeetseveryquarter,andthechairreportstoourCEO.RefertotheMessagefromtheChair,BMOSustainabilityCouncilonpage3ofthisreport.

OurBoardofDirectorsisresponsibleforenterprise-wideoversightandgovernance,andanumberofourboardcommitteemandatesincludeaddressingESGmatters.Forexample,theAuditandConductReviewCommitteereviewsreportsonenvironmental,socialandgovernanceissues,andtheHumanResourcesCommitteehasoversightofretentionstrategiesandexecutivecompensation.

Furtherinformation: Corporate Sustainability GovernanceandARpages20–21

4.2 Indicate whether the Chair of the highest governance body is also an executive officer (and, if so, their function within the organization’s management and the reasons for this arrangement).

TheChairoftheBoardofDirectorsisnotanexecutiveofficer.

4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

RefertoSustainabilityIssuesThatMatterMostonpages9–19ofthisreport.

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

Shareholders,employeesandotherinterestedpartiesmaycommunicatedirectlywiththeBoardofDirectorsthroughtheChairmanoftheBoard.Refertopage42ofthePCforthefulladdress.

http://www.bmo.com/home/about/banking/corporate-responsibility/our-approach/our-commitment#corporate_responsibility_governance


GRIIndicator

Description


Governance, Commitments and Engagement continued

4.5 Linkage between compensation for members of the highest governance body, senior managers and executives (including departure arrangements), and the organization’s performance (including social and environmental performance).

Theboard’sGovernanceandNominatingCommitteeannuallyreviewsandbenchmarksdirectors’compensationagainstthebank’speergrouptoensureitiscompetitiveandconsistentwiththeresponsibilitiesofdirectors.Directors’compensationisdisclosedonpages24–25ofthePC.

BMO’scompensationpoliciesandstructuresupportourvisiontobethebankthatdefinesgreatcustomerexperience.Atthestartofeachyear,theboard’sHumanResourcesCommitteesetsoperatingtargetsthatreinforcethebank’sstrategicprioritiesandvalues.Atyearend,itassessesbankandoperatingperformanceagainstthesetargetstakingintoconsiderationinternalmeasuresofsuccessandourperformancerelativetoourpeers.IndividualperformanceagainstannualobjectivesfortheCEOandseniorexecutivesisalsoassessed,afterwhichtheallocationofincentiveawardsismadetotheCEOandseniorexecutives.

Furtherinformation:PC,startingonpage57

Asanincentiveforenvironmentalperformance,weprovidemonetaryrewardstoenvironmental/sustainabilitymanagement,thecorporaterealestateexecutiveteamandfacilitymanagers.Furtherinformation:BMO CDP Response

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Toensureethicalandindependentdecision-making,wehaveaprotocoltoidentifyanddealwithdirectorconflictsofinterest.Directorsorexecutiveofficerswithamaterialinterestinamattercomingtotheboard’sattentiondonotreceiverelatedboardmaterials,andarenotpresentforanydiscussionsorrelatedvotes.

4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization’s strategy on economic, environmental and social topics.

Theboard’sGovernanceandNominatingCommitteedecideswhatskillsandcompetenciestheboardrequires,assessestheskillsofcurrentboardmembersandidentifiesandrecommendssuitabledirectorcandidates.Thisassessmenthelpsdetermineiftheboardneedsnewdirectors.InkeepingwiththeBoardDiversityPolicy,potentialcandidatesarescreenedforseveralattributes,includingethicsandintegrity,rangeofexperience,goodbusinessjudgment,areasofexpertise,personalskillsandqualities,gender,age,ethnicityandgeographicbackground.Thecommitteealsotakesintoconsiderationpossibleconflicts,andtheirabilitytodevotesufficienttimeandcommitmentasadirector.Diversityofbackground,genderandgeographyisalsotakenintoconsideration.Thepolicyonmajorityvotingtoelectdirectorsisdescribedonpage5ofthePC.

Furtherinformation:PC,SkillsMatrixonpage23

4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental and social performance and the status of their implementation.


http://www.bmo.com/home/about/banking/corporate-responsibility/environment/environmental-performance#cdp


GRIIndicator

Description


Governance, Commitments and Engagement continued

4.9 Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct and principles.

Seeindicator4.1andrefertoSustainabilityIssuesThatMatterMostonpages9–19ofthisreport.

4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental and social performance.

Annually,eachdirectorcompletesananonymousboardself-assessmentsurveyandhasaone-on-oneinterviewwiththechairman.Everydirectorassessesthecontributionofeachoftheirpeersagainsttheperformancestandardsforthedirectorposition.Whenassessingthechairman,theGovernanceandNominatingCommitteeseeksinputfromeachdirector.Eachboardcommitteeandcommitteechairisalsoseparatelyassessed.

Furtherinformation:PCpage38–39

4.11 Explanation of whether and how the precautionary approach or principles is addressed by the organization.


4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organization subscribes or endorses.

Memberships and Associations

4.13 Memberships in associations (such as industry associations) and/or national/international advocacy organizations.

RefertoStakeholderEngagementonpages21–24ofthisreport.

Furtherinformation:Memberships and Associations

4.14 List of stakeholder groups engaged by the organization.


4.15 Basis for identification and selection of stakeholders with whom to engage.


4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.


4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.


http://www2.bmo.com/content/0,1089,divId-7_langId-1_navCode-4856,00.html

http://www2.bmo.com/content/0,1089,divId-7_langId-1_navCode-4856,00.html


GRIIndicator

Description


Product and Service Impact

FS1 Policies with specific environmental and social components applied to business lines.

Environmentalandsocialrisksincludethethreatofadverseeffectsonthenaturalenvironmentthroughemissions,wastesandresourcedepletion,aswellasriskstothelivelihoods,healthandrightsofcommunitiesandtheirculturalheritagearisingoutofaclient’sbusinessoperationsandBMO’sfinancingactivities.Theexistenceofenvironmentalandsocialrisksdoesnotprecludethebankfromprovidingfinancingtoaborrower.WehaveinternalpoliciesapplicabletoourCommercialBankingandBMOCapitalMarketsbusinessestoprovideguidanceonhowtoidentify,manageandmitigateenvironmentalandsocialriskinfinancingtransactions.ThepoliciesareregularlyreviewedandapprovedbyexecutivesintheRiskManagementarea.

FS2 Procedures for assessing and screening environmental and social risks in business lines.

Duediligenceisperformedbythelineofbusinesssothatwecandetermineifthemagnitudeoftheenvironmentalandsocialrisksismaterial.ThefindingsareincludedinthetransactionapplicationthatissenttoRiskManagementforitsapproval.Environmentalriskismostprevalentwhendealingwithenvironmentallysensitiveindustries.Wehaveidentifiedmorethan50industriesthatwesubjecttoahigherlevelofenvironmentalduediligence.WeevaluatesocialrisksbyassessinghowwellaclientmanagesregulatoryandotherrisksrelatedtostakeholderengagementandissuesrelatedtoAboriginalconsultation.Specificduediligencequestionsonbothaspectsareoutlinedinourfinancingpolicies.

FS3 Processes for monitoring clients’ implementation of and compliance with environmental and social requirements included in agreements or transactions.

Socialandenvironmentalrequirementsintransactionagreementsaremonitoredbythelineofbusinessinthesamewayasothertransactionrequirements.

FS4 Process(es) for improving staff competency to implement the environmental and social policies and procedures as applied to business lines.

Updatestoourpoliciesarewidelydistributedtoallaffectedemployeesand,whenrequired,weraiseadditionalawarenessonacase-by-caseorissue-by-issuebasiswithkeydecision-makers.In2013,BMOimplementedESGtrainingforBMOCapitalMarketsemployeestoensurethatthereisconsistencyintheunderstandingofenvironmentalandsocialrisksacrosstheenterprise.Thetrainingincludesidentificationofemergingissues,anoverviewofBMO’sduediligenceprocedures,andtoolstoassistemployeesinidentifyingandmanagingenvironmental,socialandgovernancerisks.

FS5 Interactions with clients/investees/business partners regarding environmental and social risks and opportunities.

Weworkwithourclientsandsupplierstounderstandandmanagesocialandenvironmentalrisks,andtotakeadvantageofopportunities.ThisalsooccursinourCommercialBankingandBMOCapitalMarketsbusinesseswhereclientsmayneedfinancingtotakeadvantageofenvironmentalopportunities.

35 GRIIndex:PerformanceIndicators

Performance Indicators

BMO Financial Group36 GRIIndex:PerformanceIndicators

GRIIndicator

Description


Product and Service Impact continued

FS9 Coverage and frequency of audits to assess implementation of environmental and social policies and risk assessment procedures.

Themanagementofenvironmentalandsocialrisksisintegratedintoourenterprise-wideriskmanagementprocesses.Asamatterofcourse,ourinternalauditfunctionconductsauditsonallbankunitsperiodically.Thisauditincludesassessingcompliancewithrelevantenvironmentalandsocialriskpolicies.

Economic

DMA Economic RefertoEconomicImpactonpage6ofthisreport.

EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments.

RefertoEconomicImpactonpage6ofthisreport.

Forabreakdownofexpenses,suchasemployeecompensation,premisesandequipmentandgovernmentleviesandtaxes,seeARpage109(Table8).

EC2 Financial implications and other risks and opportunities for the organization’s activities due to climate change.

WedisclosehowwemanageclimatechangeinourCarbonDisclosureProject(CDP)submission.

Furtherinformation:BMO CDP Response

EC3 Coverage of the organization’s defined benefit plan obligations.

WeprovideadefinedbenefitpensionprogramtoeligibleBMOemployeesinCanadaandcertaineligibleBMOemployeesintheUnitedStates.Weprovidedefinedcontributionpensionandsavingsprogramstoemployeesinsomeofoursubsidiaries.Thebank’spensionplansaremanagedprudentlyandinaccordancewithallapplicablelawsandregulations.

Furtherinformation:ARpages167-171

EC4 Significant financial assistance received from government.

None.

EC6 Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation.

In2013,wepurchasedalmost$4billionworthofgoodsandservicesfrommorethan17,000suppliers.Ofthat,approximately$2.7billionwasspentthroughourCanadianoperationsandapproximately$1.3billionwasspentthroughourU.S.operations.

Supplierselectionisbasedonthedeliveryofproductsandservicesthatarethebestinvalue,qualityandperformance.Wehaveacomprehensivesustainableprocurementpracticethatincludesenvironmentalandsocialconsiderationsintheprocessofevaluatingandselectingsuppliersacrosstheenterprise.BMOStrategicSourcingisresponsibleforsuppliergovernancestandardsthatestablishtheprocurementpracticesforBMOemployees.

Furtherinformation:BMO Sustainable Procurement Questionnaire


http://www.bmo.com/home/about/banking/corporate-responsibility/environment/environmental-approach#eco5

2013 Environmental, Social and Governance Report and Public Accountability Statement37 GRIIndex:PerformanceIndicators

GRIIndicator

Description


Economic continued

EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of significant operation.

Weexpectourseniorleaderstobeactiveparticipantsintheirlocalcommunities.Ouremployeesreflecttheneighbourhoodsinwhichweliveandwork,andwemakesurewehavetherightpeopleintherightrolestomeetcustomerneeds.Ourjobsarepostedinsidethecompanyandonourexternalsite(www.bmo.com),andweusenationalandregionaljobboardsandlocal,in-branchmarketingtohighlightBMOemploymentopportunities.

EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement.

RefertoSocialImpactonpage7andImpactInvestingonpage8ofthisreport.

EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts.

Weplayanimportantroleincreatingaproductiveandprosperoussociety.Wehelppeoplebuyhomes,savefortheirchildren’seducationandbuildsecureretirementplans.Wehelpsmallbusinessesgrow,helpgrowingbusinessesbecomemorecompetitive,helpcompetitivebusinessesfindnewmarketsandhelpallbusinessesbemoreinnovative.

Weprovidedirecteconomicsupportthroughjobcreation.Webuygoodsandservicesfromlargeandsmallcompaniesaswellasfromindividualcontractors,andwepaytaxes.

RefertoEconomicImpactonpage6,andSocialImpactonpage7ofthisreport.

Furtherinformation:2013 Corporate Responsibility Report

Environmental

DMA Environmental Wearecommittedtominimizingtheenvironmentalimpactsofourbusinessoperationsthroughbest-practicemanagementofourenergyuse,transportation,materialconsumption,wateruse,waste,emissionsandeffluent.Aspartofthiscommitment,wehavedevelopedarobustenvironmentalmanagementsystemthatdescribestheobjectives,targetsandprocessesinplacetomitigatetheseimpacts.Wemonitorperformanceagainstourstatedobjectivesinpursuitofcontinualimprovementinourenvironmentalperformanceandongoingpollutionprevention.

Furtherinformation:ARpage99

Note:Mostrecentenvironmentalperformancedataisavailableonourwebsite.

EN1 Materials used by weight or volume. Environmental Performance

http://www.bmo.com/home/about/banking/corporate-responsibility/our-approach/reporting#cr



GRIIndicator

Description


Environmental continued

EN2 Percentage of materials used that are recycled input materials.

Environmental Performance

EN3 Direct energy consumption by primary energy source. Environmental Performance

EN4 Indirect energy consumption by primary energy source.


EN5 Energy saved due to conservation and efficiency improvements.

BMO CDP Response

EN6 Initiatives to provide energy-efficient or renewable energy-based products and services, and reductions in energy requirements as a result of these initiatives.

Thisindicatorisnotapplicabletoourbusinessbecauseourproductsandservicesarefinancial.Wecontinuetofocusonprovidingclientsandshareholderswithelectronicoptionstoreduceenergyusedincreatingandsendingpapermaterials.

EN7 Initiatives to reduce indirect energy consumption and reductions achieved.

Foralistofourinitiativestoreduceindirectenergyconsumption,goto:BMO ECO5 Strategy.Foryear-over-yeardataonthereductionsachieved,goto:Environmental Performance

Furtherinformation:BMO CDP Response

EN8 Total water withdrawal by source. Thisindicatorisnotapplicablebecauseweuserelativelylittlewatertooperateourbusiness.

EN11 Location and use of land owned, leased or managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

Thisindicatorisnotapplicabletoourbusinessoperations.BMO’spropertyportfolioislocatedinurbanareasorwithinthetowncentresofruralareasanddoesnotdirectlyaffectbiodiversehabitats.BiodiversityimpactsthatmayariseinprojectfinancetransactionsaremitigatedbyourclientsthroughourapplicationoftheEquatorPrinciples.

EN12 Description of significant impacts of activities, products and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

SeeindicatorEN11

EN16 Total direct and indirect GHG emissions by weight. Environmental Performance

EN17 Other relevant direct and indirect GHG emissions by weight.


EN18 Initiatives to reduce GHG emissions and reductions achieved.

BMO ECO5 Strategy Environmental Performance BMO CDP Response









http://www.bmo.com/home/about/banking/corporate-responsibility/environment/environmental-approach#eco5strategy





GRIIndicator

Description


Environmental continued

EN19 Emissions of ozone-depleting substances by weight. Environmental Performance

EN21 Total water discharge by quality and destination. Thisindicatorisnotapplicablebecauseweuserelativelylittlewater(andthereforehaveminimaldischarge)tooperateourbusiness.

EN22 Total weight of waste by type and disposal method. Environmental Performance

EN23 Total number and volume of significant spills. None.

EN25 Identity, size, protected status and biodiversity value of water bodies and related habitats significantly affected by the reporting organization’s discharges of water and runoff.

ThisindicatorisnotapplicablebecauseBMO’swaterisdischargedtopublicwastewatertreatmentfacilities,notdirectlyintowaterbodiesandrelatedhabitats.

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation.

Targets

EN27 Percentage of products sold and their packaging materials that are reclaimed by category.

Thisindicatorisnotapplicable.BMOproductsdonothavepackagingmaterialstobereclaimed(recycledorreused).

EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

BMOhasnotpaidanysignificantfinesorbeenotherwisesanctionedfornon-compliancewithenvironmentallawsorregulations.

EN29 Significant environmental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce.

BMO ECO5 StrategyEnvironmental Performance

EN30 Total environmental protection expenditures and investments by type.

Environmentalprotectionexpendituresforfiscalyear2013:

Wastedisposal,emissionstreatmentandremediationcosts $9,176,742

Preventionandenvironmentalmanagementcosts $556,183

Total $9,732,925

39 GRIIndex:PerformanceIndicators




http://www.bmo.com/home/about/banking/corporate-responsibility/environment/carbon-neutral



GRIIndicator

Description


Social: Labour Practices

DMA Labour Practices and Decent Work AtBMO,ourresponsibilitytoouremployeesextendsbeyondprovidingjobs.Ourmandateistoopenupnewavenuesinprofessionalandpersonaldevelopment,helpingpeopleexpandtheirhorizonsanddiscoverexcitingcareerpossibilities.

Furtherinformation: BMO’s Talent Strategy

LA1 Total workforce by employment type, employment contract and region.

Refertopage56ofthisreport.

LA2 Total number and rate of employee turnover by age group, gender and region.

RefertoBMO’sESGScorecardonpage20ofthisreport.TheU.S.figurefor2011excludestheM&IacquisitionthatoccurredinJuly2011.

TurnoverrateisdefinedintheGlossaryofTermsonpage52ofthisreport.

Note:Wetrackturnoverbyagegroupandgender,butwedonotdisclosethemetricsatthistime.

LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations.

RefertoSustainabilityIssuesThatMatterMostonpage17ofthisreport.

Furtherinformation:Work and Life Effectiveness

LA15 Return to work and retention rates after parental leave, by gender.

BMOiscommittedtosupportingwork/lifebalanceforallemployees,includingthosereturningfromparentalleave.Wheneverpossible,employeesreturntotheirformerposition.Insomeinstances,employeesarereadyforacareermovewithinBMO,ormaybelookingtoreducetheirworkschedule.BMO’sHRpoliciesandpracticessupportemployeesinidentifyingopportunitiesthatarethebestmatchatvariousstagesintheircareer.

BMOdoesnotformallytrackretentionratesafterparentalleavebygender.

LA4 Percentage of employees covered by collective bargaining agreements.

Currently,0%ofemployeesarecoveredbycollectivebargainingagreements.ForBMO’spositiononfreedomofassociationandcollectivebargaining,goto:BMO on the issues

LA5 Minimum notice period(s) regarding operational changes, including whether it is specified in collective agreements.

Whenmanagingchangeduetoacquisitions,restructuringoroutsourcing,ourgoalistogiveaffectedemployeesasmuchnoticeaspossiblesotheyareclearaboutwhat’shappeningandcanfindotheremployment.Wemeetorexceedminimumnoticeperiods,andadheretoBMO’svalues,principles,practicesandlegalobligations.

http://www.bmo.com/home/about/banking/corporate-responsibility/employees/investing-people


http://www.bmo.com/home/about/banking/corporate-responsibility/our-approach/our-commitment#issues


GRIIndicator

Description


Social: Labour Practices continued

LA6 Percentage of total workforce represented in formal joint management–worker health and safety committees that help monitor and advise on occupational health and safety programs.

InCanada,BMO(excludingBMONesbittBurns)hasbeengrantedanexemptionbyHumanResourcesandSkillsDevelopmentCanadaandisnotrequiredtooperatejointcommittees.BMONesbittBurnsoperatesjointHealthandSafetycommittees,asprescribedbytheapplicableprovinciallegislation.

IntheUnitedStates,thereisnolegislationorlawrequiringBMOHarrisBanktooperatejointcommittees.

LA7 Rates of injury, occupational diseases, lost days and absenteeism, and number of work-related fatalities by region.

Wehaven’trecordedanywork-relatedfatalities.Althoughwedonottrackratesofinjuryordisease,asafinancialinstitution,stressistheleadingcauseofshort-andlong-termlosttime.Wefocusonhelpingemployeesreturntoworkandaddressingtheirneedsoncetheyreturn.

EffectiveJune16,2013,aninternalHRsystemwasimplementedthatrequiresallBMOemployeesinCanadaandtheUnitedStatestotrackabsencesfromwork,includingsickdays.Asaresult,inthefuturewewillbeabletoreportonthenumberofsickdaysacrossBMOannually.

ThefollowingsickdayswerereportedfromJune16tomid-October2013:

Numberofsickdays

BMOCanada(excludingBMONB) 23,949

BMOHarrisBank(U.S.) 14,139

BMONesbittBurns 526

Total 38,614

LA8 Education, training, counselling, prevention and risk-control programs in place to assist workforce members, their families or community members regarding serious diseases.

BMOemployeesarenotinjobsassociatedwithahighincidenceorhighriskofspecificdiseases.

OurHealthandSafetyPoliciesoutlineexecutive,managerandemployeeresponsibilitiesinmaintainingahazard-freeworkplace,andwecreateawarenessthroughmandatoryannualtraining.

BMO’sEmployeeAssistanceProgramandLifeWorksprovideconfidentialcounsellingtoemployees,bothactiveandpensioned,andtheirdependentfamilymembers.Inaddition,wehaveawiderangeofmedicalbenefitstohelpplanforandrespondtodifferenthealthneeds.

BMO’sChiefMedicalOfficerandteamworkcloselywithprovincialandnationalhealthauthoritiestoensurethatwecanrespondtowidespreadhealthsituationssuchaspandemics.

Furtherinformation:Work and Life Effectiveness



GRIIndicator

Description


Social: Labour Practices continued

LA10 Average hours of training per year per employee by employee category.

Wearecommittedtoprovidingtrainingforallouremployeesatalllevels,fromentry-levelpositionstoseniorexecutives.Wearenotdisclosingtheaveragehoursoftrainingperyearperemployeethisyearbecausewechangedsystemsfortrackingthisnumberin2013.Weareevaluatingwhetherthisisthebestmetrictoassesseffectivenessoftraining.

LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings.

BMOencouragesongoingemployeedevelopmentthroughsubsidiesfortuitionandprofessionalaccreditation,paidinternshipopportunities,formalmentoringprogramsandcareerplanningworkshops.Inaddition,wehaveprogramsforemployeeswhoarepreparingforretirement,suchassuccessionandretirementplanning.Foremployeeswhohaveretired,weprovidepaidhealthbenefits,organizedsocialactivitiesandvolunteeropportunities.

LA12 Percentage of employees receiving regular performance and career development reviews.

“Turnyourpotentialintoperformance”isBMO’semployeepromise.Ourperformanceplanningandassessmentpracticesembedtheimportanceofongoingfeedbackandperformanceconversationsbetweenmanagersandemployees.

During2013,BMOintroducedanonlineperformanceapplication,providingemployeesandmanagerswithenhancedsupportfortheirperformanceandcareerdevelopmentconversations.

LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity.

RefertoBMO’sESGScorecardonpage20andOurLeadershipPrioritiesonpages25-26ofthisreport.

LA14 Ratio of basic salary of men to women by employee category.

BasesalarypoliciesandpracticesatBMOaregender-neutral,requiringmanagerstoconsiderknowledge,skillsandabilities,aswellassustainedperformance,whenmakingpaydecisions.InsupportofBMO’spaypolicies,paystructuresaredesignedtobemarket-competitivethroughtheuseofexternalsurveysofpaylevelsforsimilarrolesinadiversemarketplace.Ongoingreviewsofbasesalariesformaleandfemaleemployeesoccuracrosstheenterprise,toensurecomparablepaylevelsforsimilarrolesand/orjoblevelswithsimilarexperience.


GRIIndicator

Description


Social: Human Rights

DMA Human Rights RespectforhumanrightsisdeeplyembeddedinBMO’scorporatecultureandinallofourpolicies.FirstPrinciples:ourcodeofconductreflectsourcommitmenttohighstandardsofbusinessconductandethics.FirstPrinciplesguidesustoensurethatwhatwedoisfair,rightandlegal.FirstPrinciplesandourStatementonHumanRightsapplytoBMOanditssubsidiaries.

Furtherinformation:Code of ConductandBMO on the issues

HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken.

WhensuppliersareinvitedtoparticipateinanRFX,weaskrespondentstoinformthemselvesofourcodeofconductanddirectthemtotherelatedlinkonourwebsite.Inaddition,wehavecomprehensivesustainableprocurementpracticesthatincludesenvironmentalandsocialconsiderationswhenevaluatingandselectingoursuppliers.

Furtherinformation:BMO Sustainable Procurement Questionnaire

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

FirstPrinciples:ourcodeofconduct,reflectsourcommitmenttodoingwhatisfair,rightandlegal.AllBMOemployeesmustcompleteFirstPrinciplestrainingonanannualbasis.Almostallemployees(98.9%▲)hadcompletedtheonlinetrainingasofJune30,2013(thelastdayofourthree-monthtrainingperiod).Takingnormalemployeeturnoverintoconsideration,acompletionrateof97%oraboveisconsideredtoinclude100%oftheemployeepopulationrequiredtotakethetrainingduringthedefinedtimeperiod.Newandreturningemployeesmustcompletethetrainingwithin30calendardaysoftheirstartdate.

TotalnumberoftraininghoursonBMO’sCodeofConductforfiscal2013(November1,2012–October31,2013).

Baseline(newemployees) 14,188hoursRefresher 14,775hours

Total 28,963 hours

Furtherinformation:Code of Conduct

http://www.bmo.com/home/about/banking/corporate-governance/code-of-conduct

http://www.bmo.com/home/about/banking/corporate-governance/code-of-conduct


http://www.bmo.com/home/about/banking/corporate-responsibility/environment/environmental-approach#eco5


GRIIndicator

Description


Social: Human Rights continued

HR4 Total number of incidents of discrimination and actions taken.

BMOreceivesformalcomplaintsthroughtheCanadianHumanRightsCommission,provincialequivalents(inCanada)ortheU.S.EqualEmploymentOpportunityCommission.Wetakeallcomplaintsseriously,andthemajorityareresolvedatthepreliminarystagesoftherespectiveprocesses.During2013,BMOreceived24formalcomplaints,ofwhichsixhavebeenresolved.Thefollowingisabreakdownofcomplaintsbasedontheallegedbasisofdiscrimination:

Categorization Number of formal complaints

Disability 6Differentialtreatment 7Familystatus/sex/gender 5Ethnicorigin/race 6

Total 24

KeymetricsrelatedtothisindicatorareincludedinourESGScorecardonpage20.

HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

BMOrespectstherightofallpeopletojoin(ornotjoin)atradeuniontobargaincollectively.

ToviewBMO’sStatementonfreedomofassociationandcollectivebargaining,goto:BMO on the issues

HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour.

BMOrespectsitshumanrightsresponsibilitiesandcomplieswithlawsandinternationallyrecognizedhumanrightseverywhereitoperates.

ToviewBMO’sstatementonhumanrights,goto:BMO on the issues

HR7 Operations identified as having significant risk for incidents of forced or compulsory labour, and measures to contribute to the elimination of forced or compulsory labour.

SeeindicatorHR6

HR8 Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations.

AllBMOCorporateSecuritystaffcompleteonlinetrainingmodulesdesignedtoassessawareness,understandingandcompliancewithkeyethical,legalandregulatoryrequirements.Ourstaffiscommittedtoensuringasafeandsecureworkplaceandhandlingviolationsofworkplacesafety.Allthird-partysecuritystaffmustmeetthesamehighstandards.Wemanagethird-partysecurityvendorsbymeetingwiththemregularlytoensuretheycomplywithourstandardsandtoreviewprocessesandincidents.




GRIIndicator

Description


Social: Society

DMA Society RefertoSocialImpactonpage7ofthisreport.

SO1 Nature, scope and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating and exiting.

Werarelyleaveacommunityaltogetherbutwhenwedocloseorrelocateabranch,wedoallwecantominimizetheinconveniencetoourcustomers.WecomplywithfederallegislationinCanadaandtheUnitedStatesforgivingnoticetoaffectedcustomers.

FS13 Access points in low-populated or economically disadvantaged areas by type.

RefertoSocialImpactonpage7ofthisreport.

FS14 Initiatives to improve access to financial services for disadvantaged people.

RefertoSocialImpactonpage7ofthisreport.

BMOiscommittedtomakingourfacilitiesandservicesaccessibletopeopleofallabilities.

Furtherinformation:Accessibility at BMO

SO2 Percentage and total number of business units analyzed for risks related to corruption.

ToviewBMO’spositiononanti-corruption,goto:BMO on the issues

SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures.

AsofJune30,2013,98.8%ofemployeeshadcompletedanti-corruptiontrainingglobally.Specializedtrainingforcompliancepersonnelandareasatgreaterriskofcorruptionwasdevelopedin2013andpilotedinToronto.

SO4 Actions taken in response to incidents of corruption. Wedonottrackorrecordemployeeswhohavebeendismissedordisciplinedforcorruption-relatedactivity.Nordowetrackorrecordthenumberofcontractsthatwedidnotrenewwithbusinesspartnersduetocorruption-relatedviolations.

SO5 Public policy positions and participation in public policy development and lobbying.

ToviewBMO’spositiononlobbying,goto:BMO on the issues

InCanada,informationregardingBMO’sfederallobbyingactivitiescanbeviewedbysearchingfor“BMO”intheFederalRegistryofLobbyistsatwww.ocl-cal.gc.ca

TheBMOHarrisBankGovernmentAffairsFundisapoliticalactioncommittee(PAC)thatpoolsemployeecontributionsanddonatesthesefundstocampaignfororagainstcandidates,ballotinitiativesorlegislation.Ourcompany’sPACfilesamonthlyreportwiththeFederalElectionsCommission(www.fec.gov).

http://www.bmo.com/home/about/banking/accessibility/accessibility-at-bmo?nav=left



http://www.ocl-cal.gc.ca/eic/site/012.nsf/Intro


GRIIndicator

Description


Social: Society continued

SO6 Total value of financial and in-kind contributions to political parties, politicians and related institutions, by country.

BMOsupportseffortstoenhancethefairnessandtransparencyoftheelectoralsystemsinthejurisdictionswherewedobusiness.

Historically,BMOhassupportedthepoliticalprocessinCanadathroughfinancialcontributionstopoliticalpartiesandcandidates.Suchcontributionsarepermittedineightprovinces(exceptManitobaandQuebecandatthefederallevel).Wecontributed$67,620topoliticalpartiesandcandidatesintheseprovincesduringthereportingperiod.

IntheUnitedStates,totaldonationstopoliticalorganizationsbytheBMOHarrisBankGovernmentAffairsFundfromOctober1,2012toSeptember30,2013wereUS$60,393.

BMOalsosupportsthepoliticalprocessthroughsupportoforganizationssuchastheParliamentaryInternshipProgramme,thePublicPolicyForumandtheCanadianAssociationofFormerParliamentarians.In2013,BMOreneweditscommitmentof$250,000overthenextfiveyearsasleadsponsoroftheHouseofCommonsParliamentaryInternshipProgramme,oneofthemostimportantlegislativetrainingprogramsinthecountry.BMOhasbeenalong-timesupporterofthisProgrammeandbecametheleadcorporatesponsorin1999.

SO8 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

Therewerenosignificantfines/monetarysanctionsin2013.▲

Non-monetarysanctionsarenotdisclosedastheymaybeproprietary.

RefertotheGlossaryofTermsonpage52ofthisreportforthedefinitionofsignificant.

Social: Product Responsibilty

DMA Product Responsibility We’reheretohelpindividualsandbusinessesmakethebestdecisions–ontheirterms–byunderstandingwhat’snotintheirbestinterestandbypointingtosolutionsthatfittheirbudgetandlong-termgoals.Weensurethatallproductsandservicesmeetconsumerprotectionlawsandregulations,FirstPrinciples:ourcodeofconduct,andanyrelatedvoluntarycodesofconduct.Andweaimtomakeiteasierforcustomerstodobusinesswithus.

Furtherinformation:Product ResponsibilityandResponsible Lending

http://www.bmo.com/home/about/banking/corporate-responsibility/customers/product-responsibility

http://www.bmo.com/home/about/banking/corporate-responsibility/customers/responsible-lending


GRIIndicator

Description


Social: Product Responsibilty continued

FS15 Policies for the fair design and sale of financial products and services.

Inadditiontoourenterprise-widepolicy,FirstPrinciples:ourcodeofconduct,wehavepoliciesthatfocusontreatingcustomersfairly,protectingtheiridentityandpersonalinformation,andnotmisleadingthemwhenofferingcertainofourproductsandservices.Wealsohavecomplianceprogramstoensurewecomplywithconsumerprotectionlaws.

Our Retail Business

InCanada,theFinancialConsumerAgencyofCanadasupervisesfederallyregulatedfinancialinstitutionstoensuretheycomplywithfederalconsumerprotectionlaws,voluntarycommitmentsandcodesofconduct.Forexample,financialinstitutionsarerequiredtoprovideconsumerswithinformationaboutthecostofborrowing,complaint-handlingprocedures,fees,interestratesandbranchclosures.

IntheUnitedStates,theConsumerFinancialProtectionBureau(CFPB)supervisesfederallyregulatedfinancialinstitutions.TheCFPBisresponsibleforprotectingconsumersagainstunfair,deceptiveorabusiveactsorpractices,andforenforcinglawsrelatedtodiscriminationandotherunfairtreatment.

Our Wealth Management Business

Ourregulatorsoverseeustoensurewecomplywithregulatoryandinvestmentindustrystandardsofpracticeandbusinessconduct,investorprotectionguidelinesandrulesintendedtofostermarketintegrity.

InCanada,ourmainregulatorsincludeInvestmentIndustryRegulatoryOrganizationofCanadaandtheMutualFundDealersAssociation,whichoverseeprovinciallyregulatedinvestmentfirms.

IntheUnitedStates,ourmainregulatorsincludetheFinancialIndustryRegulatoryAuthority,theSecuritiesandExchangeCommission,OfficeoftheComptrolleroftheCurrencyandtheDepartmentofLabor.

Furtherinformation:Treating Customers FairlyandCode of Conduct

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.

Thisindicatorisnotapplicable.TheproductsandservicesBMOprovidesdonothavehealthorsafetyimpacts.InformationonprotectingthehealthandsafetyofthosewhodeliverourproductsandservicesisintheLabourPracticesandDecentWorksection,underemployeehealthandsafety(LA6–LA8).

PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.

Thisindicatorisnotapplicable.TheproductsandservicesBMOprovidesdonothavehealthorsafetyimpacts.

PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements.

Wegiveourcustomersinformationonfees,interestrates,branchclosuresandcomplaint-handlingprocedures.Andweensurethatallnewproductsandservicesmeetconsumerprotectionlawsandregulations,FirstPrinciples:ourcodeofconductandanyrelatedvoluntarycodesofconduct.

http://www.bmo.com/home/about/banking/corporate-responsibility/customers/right-of-customers

http://www.bmo.com/home/about/banking/investor-relations/corporate-governance/code-of-conduct


GRIIndicator

Description


Social: Product Responsibilty continued

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

InCanada,nomaterialincidentsofnon-compliancewithregulationsandvoluntarycodesrelatingtoproductandserviceinformationorlabellinghavebeenidentifiedduringthereportingperiod.

IntheUnitedStates,nineincidentsofnon-compliancewithregulationsandvoluntarycodesconcerningproductandserviceinformationandlabelingwereidentifiedduringthereportingperiod.Sevenofthesewereresolvedandclosedattheendofthereportingperiod.Weexpecttofullyremediateandclosetheremainingtwoincidentswithinthefirsthalfoffiscal2014.

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction.

RefertoSustainabilityIssuesThatMatterMostonpage10ofthisreport.

Furtherinformation:Contact BMOorBMO Harris Bank

FS16 Initiatives to enhance financial literacy by type of beneficiary.

RefertoLeadershipPrioritiesonpage26ofthisreport.

Furtherinformation:Financial Literacy

PR6 Programs for adherence to laws, standards and voluntary codes related to marketing communications, including advertising, promotion and sponsorship.

Weensurethatallmarketingcommunicationsfollowourownadvertising,sponsorshipandbrandguidelines,andwheredeemednecessaryincludelegalorcompliancereviewsasapplicable.InCanada,TelecasterServices,adivisionoftheTelevisionBureauofCanada,andtheCanadianBroadcastingCorporationreviewscriptsandfinalproducedspotsforallEnglishandFrenchtelevisioncommercials.NetworkclearanceisnotrequiredintheUnitedStates.Radio,printandonlineadvertisingmaterialsforCanadaandtheUnitedStatesdonotrequirethird-partyapprovals.

PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion and sponsorship, by type of outcomes.

Duringthereportingperiod,therewerenoincidentsofnon-compliancewithregulationsorvoluntarycodesformarketingcommunicationsinCanadaortheUnitedStates.AdvertisingStandardsCanada(ASC)receivedtwocomplaintsaboutaBMO®ReturnEnhancingGICadvertisement.OnceweprovidedASCwiththerequiredinformationtheincidentswereconsideredresolvedandclosed.

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data.

TwocomplaintsregardingbreachesofcustomerprivacyweresubstantiatedbytheOfficeofthePrivacyCommissionerofCanadain2013.

PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

Therewerenosignificantfinesfornon-compliancewithlawsandregulationsrelatedtotheprovisionanduseofproductsandservicesduringthereportingperiod.

http://www.bmo.com/home/about/banking/corporate-info/contact-us/email

https://www.bmoharris.com/us/about

http://www.bmo.com/home/about/banking/corporate-responsibility/customers/financial-literacy

2013 Environmental, Social and Governance Report and Public Accountability Statement49 AwardsandRecognition

Awards and Recognition*

Business Awards

■ BestTradeBankinCanadabyTrade Financemagazine

■ Canada’sBestInvestmentBankby Global Financemagazine

■ CanadianCouncilforAboriginalBusiness,Gold-levelcertificationinProgressiveAboriginalRelations(PAR)

■ CanadianSocietyofCorporateSecretaries–NationalGovernanceAward

■ Global Custodian Magazine’sPrimeBrokerSurveynamesBMOCapitalMarkets“BestinClass”

■ InternationalLegalTechnologyAssociation–2013InnovativeLawDepartmentoftheYear

■ SocialResponsibilityAwardfor2013presentedbytheCanadianGeneralCounselAwards

■ WorldFinancerankedBMOHarrisPrivateBankingasBestPrivateBankinCanada

Diversity Awards

■ Canada’sBestDiversityEmployers2013

■ CorporateEqualityIndexAward–BestPlacestoWorkforLGBTEmployeesfor2013

■ CorporateGovernanceAwardpresentedbytheCanadianBoardDiversityCouncil

Employer Awards

■ AmericanSocietyforTrainingandDevelopment(ASTD)2013BESTAward

■ 2013BestEmployersforNewCanadiansbyMediacorpCanadaInc.

■ Canada’sBestEmployersforCanadiansover40byMediacorpCanadaInc.(2013)

■ Canada’sTop100Employersfor2013byMediacorpCanadaInc.

■ FinancialPost’sTenBestCompaniestoWorkFor

■ GreaterToronto’sTopEmployersfor2013byMediacorpCanadaInc.

■ WhatWorks®Awardinthe”DevelopingTomorrow’sLeaders”categoryfromBersinbyDeloitte

Environmental Awards

■ 2013Canada200CarbonDisclosureLeadershipIndexbyCarbonDisclosureProject

■ GreenOfficeChallengeAwardfromCityofChicago

Sustainability Indices and Rankings

■ Corporate Knights’listofCanada’sBest50CorporateCitizens

■ DowJonesSustainabilityNorthAmericaIndex(DJSI)

■ FTSE4GoodSeriesIndex

■ Global100:MostSustainableCorporationsintheWorld

■ Maclean’s/SustainalyticslistoftheTop50SociallyResponsibleCorporationsinCanada

* Foracompletelistgoto: Awards and Recognition

http://www.bmo.com/awards

BMO Financial Group

Glossary of TermsActive employee

Includesfull-timeorpart-timepermanentemployeeswithan“active”payrollstatus,butexcludesterm/contractemployees.

Annual business with Aboriginal customers

Includesthemonetaryvalueofallcorecommercialproducts(loans,mortgagesanddeposits)heldbyAboriginalcustomersattheendofthereportingperiod.ThisfigureexcludesallinvestmentfundbalancesmanagedbyBMOforAboriginalcommunitiesandanyretailbankingservicesorproductsprovidedtoAboriginalcustomersinCanada.

Annual Employee Survey

BMO’sconfidentialandvoluntaryannualemployeesurveyisconductedbyathirdpartyonanannualbasis.Theonlinesurveyisavailabletoallactiveemployees.Resultsandinsightsfromthisvoluntarysurveyarereportedatalllevelofmanagementandaggregatedatanenterprise-widelevel.KeymetricsincludeEmployeeEngagementIndexandParticipationRate.

Annual Employee Survey Participation Rate

CalculatedasthenumberofBMOemployeeswhocompletedtheannualemployeesurveydividedbythetotalnumberofactiveemployeeswhowereinvitedtoparticipateatthetimethesurveywasadministered.TheparticipationrateincludesallBMOemployeesworldwide.

Bank of Montreal or BMO

BankofMontrealusesaunifiedbrandingapproachthatlinksalloftheorganization’smembercompaniesunderthebrand“BMOFinancialGroup”.Assuch,inthisdocument,thenamesBMOandBMOFinancialGroupmeanBankofMontrealtogetherwithitssubsidiaries.

Communities participating in BMO’s On-Reserve Housing Loan Program

ReferstothenumberofbandsinCanadathathaveappliedandbeenapprovedfortheOn-ReserveHousingLoanProgram.TheOn-ReserveHousingLoanProgramhelpscustomerslivingonreserves,whoselandandhomescannotbeusedassecurityforamortgage,toobtainhomefinancingwiththebackingofFirstNationsgovernments,withouttheneedforfederalgovernmentguarantees.Forprogramdetails,seetheAboriginal Bankinglinkonourwebsite.

Diversity

Diversityisthemixofdemographics,skills,experiencesandstylesofallBMOemployees.Diversitymetricsincludewomenemployeesinexecutiveroles(CanadaandtheUnitedStates),visibleminorityemployeesinseniorandexecutiveroles(Canadaonly)andpeopleofcolourinseniorandexecutiveroles(UnitedStatesonly),Aboriginalemployees(Canadaonly)andemployeeswithdisabilities(Canadaonly).Allactiveemployeesareincludedinthemetric.

DataisreportedfortheperiodNovember1toOctober31.

Donations

Includescash-baseddonationsanddonationsaspartoftheMatchingGiftsProgramandVolunteerGrantsProgram.Excludesin-kinddonationsandfundraisingdollars.

Employee Engagement Index (EEI)

Referstothedegreeofemployeeengagementasindicatedbytheannualemployeesurvey.EEIistheaverageoftheagreementscoresoffivesurveyquestionsthatmeasurehowemployeesfeeloverallaboutBMO,andtheirlevelofcommitment,satisfactionandadvocacyforthecompany.TheEEIscoreisanaggregateofthesurveyresultsforallBMOemployeesworldwide.

Enterprise and enterprise-wide

Theterms“enterprise”and“enterprise-wide”areusedtodescribeBankofMontrealandallofitssubsidiariesworldwide.

Environmental, Social and Governance (ESG)

ESGisthetermweusetodescribethethreedifferentareasofconcernwhenlookingatsustainabilityissuesthathaveormayhaveanimpactonourstakeholdersorourbusiness.

Equator Principles

Avoluntarycreditriskmanagementframeworkfordetermining,assessingandmanagingenvironmentalandsocialriskinProjectFinancetransactions.ProjectFinanceisoftenusedtofundthedevelopmentandconstructionofmajorinfrastructureandindustrialprojects.BMOhasbeenasignatorytotheEquatorPrinciplessince2005.

50 GlossaryofTerms

http://www.bmo.com/aboriginal/en/


Ethics training coverage

ThepercentagecoverageofethicstrainingiscalculatedbydividingthenumberofemployeeswhocompletedBMO’scodeofconductandethicstrainingcourse,FirstPrinciples,duringtheperiodApril1toJune30bythetotalnumberofemployeesasatJune30.EthicstrainingcoverageincludesallBMOemployeesworldwide.

Ethics training hours

ReferstothetotalhoursspentbyallemployeeswhohavecompletedtheFirstPrinciplestrainingcourseduringthereportingperiod.“Coursecompleted”statusrequiresthatemployees:completethetraining;passanassessmentwithascoreof80%orbettertoconfirmunderstandingofthecoursecontent;andcompletetheFirstPrinciplesDeclaration.EthicstraininghoursincludeallBMOemployeesworldwide.

Full-time equivalent (FTE)

Reflectsthenumberoffull-timeequivalentemployeesintheorganization,calculatedbasedonastandardworkweek,adjustedforovertimehoursandincludingfull-timeandpart-timeemployees.Thismeasurementisusedtocalculatethetotalworkforceworldwide,brokendownbyregion.

Incidents of discrimination

IncludesthenumberofclaimsorallegationsmadeagainstBMOandfiledthroughtheCanadianHumanRightsCommissionandprovincialequivalents(inCanada);ortheEqualEmploymentOpportunityCommissionandstate/localequivalents(intheUnitedStates)duringthereportingperiod.Incidentsofdiscriminationcanincludeclaimsandallegationsrelatingtoage,gender,personswithdisabilitiesandethnicity.Excludesinternally-reportedclaims.

Investment in training

Includesthetotaldollarsspentoninternalcourses,includingdesignanddeliveryandassociatedcosts(e.g.,travelandmaterials),administeredbyBMO’sInstituteforLearning,andcostreimbursementsforexternalcourses(e.g.,tuitionfees,travelandmaterials).

Net Promoter Score (NPS)

NPSisthenetpercentageofcustomerswhowouldrecommendBMOtoafriendorcolleague.Calculatedbysubtractingthepercentageof“detractors”(definedbasedonafive-pointscaleasthoseindicatingthey“mightormightnotrecommend”,“probablywouldnotrecommend”and“definitelywouldnotrecommend”)fromthepercentageof”promoters”(definedbasedonafive-pointscaleasthoseindicatingthey“definitelywouldrecommend”).Reportedona12-monthrollingaveragebasis.

Number of locations serving Aboriginal communities

NumberofBMObrancheslocatedonAboriginalreservelandorInuitterritories,asdefinedbytheGovernmentofCanada.ThisnumberisforCanadaonly.

Project Finance

ProjectFinanceisamethodoffundinginwhichthelenderlooksprimarilytotherevenuesgeneratedbyasingleproject,bothasthesourceofrepaymentandassecurityfortheexposure.ProjectFinancetransactionsplayanimportantroleinfinancingdevelopmentthroughouttheworld.Thistypeoffinancingisusuallyforlarge,complexandexpensiveinstallationsthatmightinclude,forexample,powerplants,chemicalprocessingplants,mines,transportationinfrastructure,environmentandtelecommunicationsinfrastructure.

Source:Equator Principles

Renewable energy purchases

Referstototalpurchasesinmegawatt-hours(MWh)ofrenewableenergycertificates(RECs)duringthereportingperiod.InCanada,RECsrepresentpowerfromcertifiedwindandlow-impacthydrogeneratorsandhavebeenusedinretailbranchesintheprovincesofOntario,BritishColumbia,Alberta,NovaScotia,NewBrunswickandPrinceEdwardIsland.IntheUnitedStates,RECsrepresentpowergeneratedfromwindturbines.InbothCanadaandtheUnitedStates,theRECsareretiredafterpurchasethroughlegalcontractwiththesupplier.

Scope 1 emissions

Referstodirectgreenhousegasemissionsfromsourcesownedand/orcontrolledbyBMO.TotalScope1emissionsarecalculatedinaccordancewiththeISO14064-1standardandincludethoseresultingfromenergycombustionfromownedfacilities(e.g.,naturalgas,heatingoil,otherfuels,),ownedtransportationassets,andsomeozone-depletingsubstances.ThisdefinitionofScope1alignswiththegreenhousegas(GHG)protocolandisreportedatanenterprise-widelevelfortheperiodNovember1toOctober31.

Scope 2 emissions

Referstoindirectgreenhousegasemissionsassociatedwiththegenerationofelectricity,heatingandcooling,orsteampurchasedforanorganization’sownconsumption.BMO’stotalScope2emissionsrepresentourworldwideoperationsandincludethoseresultingfromthepurchaseofnon-renewableelectricityandsteamforuseatourownedfacilities.ThisdefinitionalignswiththeGHGprotocolandisreportedfortheperiodNovember1toOctober31.

51 GlossaryofTerms

http://www.equator-principles.com/index.php/about-ep/faqs/42-about/frequently-asked-questions/18

BMO Financial Group

Significant fines/monetary sanctions for non-compliance with laws and regulations

ReferstosignificantmonetaryfinesthathavebeenleviedagainstBMObyaregulatorybodyduringthereportingperiod.Afineisclassifiedas“significant”ifitisgreaterthan$500,000inmonetaryvalueanddeemedbytheexternalregulatorybodytorelatetounethicalbusinesspracticesbyBMO.MonetarysanctionsrefertotheprohibitionofBMOtooperateincertainjurisdictionsorproductlines.

Significantfines/monetarysanctionsexcludefinesorsanctionslevieddirectlyonemployeesbyregulatorsforbreachoftradingrules,whereithasbeendeterminedthatBMOhasadequatepoliciesandproceduresinplacetopreventnon-compliance.Thisisdeterminedbytheregulatorybodythatperformsaninvestigationoftheindividualandtheorganizationtoensuretheorganizationwasnotawareofandunabletopreventtheindividual’sbehaviourwithbetterpoliciesandprocedures.

Thismetricexcludesfines/monetarysanctionsfornon-compliancewithenvironmentallawsandregulations.

Sponsorships

Includescash-basedsponsorshipsor“rightsfees”thatarenegotiatedasasponsorshippackagepaidbyBMO.Sponsorshipisprovidedtobothcommercialandnon-profitentities.

Turnover rate

Referstothenumberofactiveemployeesthathavevoluntarilyresignedduringthereportingperiodasaproportionofthenumberofactiveemployeesattheendofthereportingperiod.Turnoverrateexcludesexecutives.

Women executives

Referstototalnumberoffemaleleaders(e.g.,Vice-PresidentandSeniorVice-President).

Women on Board of Directors

ThepercentageofwomenwhoareindependentmembersofBMO’sBoardofDirectorsasattheendofthereportingperiod.

52 GlossaryofTerms


External Assurance Statement

Independent Limited Assurance Report to BMO Financial Group

WehavebeenengagedbytheBoardofDirectorsofBMOFinancialGroup(BMO)toundertakealimitedassuranceengagement,inrespectoftheyearendedOctober31,2013,oncertainqualitativeandquantitativeperformanceinformationdisclosedinthe2013Environmental,SocialandGovernance(ESG)ReportandPublicAccountabilityStatement(theReport)asdescribedbelow.

Inaddition,wehavebeenengagedtocheckBMO’sself-declaredGlobalReportingInitiative(GRI)applicationlevel.

Selected Indicators

Thescopeforwhichassuranceistobeexpressed,asagreedwithmanagement,includesthefollowingperformanceinformation(theSelectedIndicators):

■ Renewableenergypurchases(MWh)

■ WomenexecutivesCanadaandUS(%)

■ VisibleminorityemployeesCanada(%inseniorandexecutiveroles)

■ PeopleofcolourUS(%inseniorandexecutiveroles)

■ PersonswithdisabilitiesCanada(%oftotalworkforce)

■ AboriginalemployeesCanada(%oftotalworkforce)

■ Employeeengagementindex(EEI)score(%)

■ Annualemployeesurveyparticipationrate(%)

■ Turnoverrate(%)

■ Investmentintraining($)

■ Annualbusinesswithaboriginalcustomers($)

■ NumberofbrancheslocatedonaboriginalreservelandorInuitterritories

■ NumberofcommunitiesparticipatinginBMO’son-reservehousingloanprogram

■ Incidentsofdiscrimination(fromexternalbodies)

■ Donations($)

■ Ethicstraining(%completion)

■ Significantfinesormonetarysanctionsfornon-compliance.

TheSelectedIndicators,containedwithintheScorecardonpage20,EconomicImpactonpage6,SocialImpactonpage7,ImpactInvestingonpage8,andGRIIndexonpages29to48havebeendeterminedbymanagementonthebasisofBMO’sassessmentofthematerialissuescontributingtoBMO’ssustainabilityperformanceandmostrelevanttotheirstakeholders.Therearenomandatoryrequirementsforthepreparation,publicationorreviewofsustainabilityperformancemetrics.AssuchBMOappliesitsowninternalreportingguidelinesanddefinitionsforsustainabilityreportingwhichcanbefoundintheGlossaryofTermsintheReport.

Management’s responsibilities

ManagementisresponsibleforthepreparationandpresentationoftheReportinaccordancewithBMO’sinternalreportingguidelinesanddefinitionsforsustainabilityreportingcurrentasatthedateofourreport,fordeterminingBMO’sobjectivesinrespectofsustainabledevelopmentperformanceandreporting,includingtheidentificationofstakeholdersandmaterialissues,andforestablishingandmaintainingappropriateperformancemanagementandinternalcontrolsystemsfromwhichthereportedperformanceinformationisderived.

Our responsibility

OurresponsibilityinrelationtotheSelectedIndicatorsistoperformalimitedassuranceengagementandtoexpressaconclusionbasedontheworkperformed.WeconductedourengagementinaccordancewithInternationalStandardonAssuranceEngagements3000Assurance Engagements other than Audits or Reviews of Historical Financial Information(ISAE3000),issuedbytheInternationalAuditingandAssuranceStandardsBoard.ISAE3000requiresthatwecomplywithapplicableethicalrequirements,includingindependencerequirements.

Assurance approach

Weplannedandperformedourworktoobtainalloftheevidence,informationandexplanationsweconsiderednecessaryinordertoformourconclusionassetoutbelow.Alimitedassuranceengagementconsistsofmakinginquiries,primarilyofpersonsresponsibleforthepreparationoftheSelectedIndicators,andapplyinganalyticalandotherevidencegatheringprocedurestotheSelectedIndicators,asappropriate.Ourproceduresincluded:

■ InquiriesofmanagementtogainanunderstandingofBMO’sprocessesfordeterminingthematerialissuesforBMO’skeystakeholdergroups;

■ InquirieswithrelevantstaffatthecorporateandbusinessunitleveltounderstandthedatacollectionandreportingprocessesfortheSelectedIndicators;

■ Whererelevant,performingwalkthroughstotestthedesignofinternalcontrolsrelatingtodatacollectionandreportingoftheSelectedIndicators;

■ ComparingthereporteddatafortheSelectedIndicatorstounderlyingdatasources;

■ Inquiriesofmanagementregardingkeyassumptionsandwhererelevant,there-performanceofcalculations;and,

■ ReviewingtheSelectedIndicatorspresentedintheReporttodeterminewhethertheyareconsistentwithouroverallknowledgeof,andexperiencewith,thesustainabilityperformanceofBMO.

■ ReviewingthedisclosuresintheReportforconsistencywiththeGRIapplicationlevelrequirementsofB+.

53 ExternalAssuranceStatement

BMO Financial Group

Theextentofevidencegatheringproceduresperformedinalimitedassuranceengagementislessthanthatforareasonableassuranceengagement,andthereforealowerlevelofassuranceisprovided.

OurassurancereportisprovidedsolelytoBMOinaccordancewiththetermsofourengagement.OurworkhasbeenundertakensothatwemightreporttoBMOonthosematterswehavebeenengagedtoreportuponinthisassurancereport,andfornootherpurpose.WedonotacceptorassumeresponsibilitytoanyoneotherthanBMOforourwork,forthisassurancereport,orfortheconclusionwehavereached.

Independence and competence

InconductingourengagementwehavecompliedwiththeindependenceandotherethicalrequirementsoftheIFACCodeofEthicsforProfessionalAccountants.

Theengagementwasconductedbyamultidisciplinaryteamwhichincludedprofessionalswithsuitableskillsandexperienceinbothassuranceandintheapplicablesubjectmatterincludingenvironmental,social,governanceandfinancialaspects.

Our conclusion

Limited assurance on Selected Indicators

Basedontheproceduresperformed,asdescribedabove,nothinghascometoourattentionthatcausesustobelievethatfortheyearendedOctober31,2013,theSelectedIndicators,asdescribedaboveanddisclosedinthe2013ESGReportandPublicAccountabilityStatement,havenotbeenpreparedandpresented,inallmaterialrespects,inaccordancewithBMOFinancialGroup’sinternalreportingguidelinesanddefinitionsforsustainabilityreportingasatthedateofourreport.

GRI Application Level Check

Basedonourreviewofthedisclosuresinthereport,weconcurwithBMOFinancialGroup’sself-declaredB+GRIapplicationlevel,asdisclosedinthe2013ESGReportandPublicAccountabilityStatement.

Chartered Accountants, Licensed Public Accountants

March3,2014Toronto,Canada

54 ExternalAssuranceStatement

2013 Environmental, Social and Governance Report and Public Accountability Statement55 PublicAccountabilityStatement

Bank of Montreal Public Accountability StatementThePublicAccountabilityStatementoutlinescertainaspectsofBankofMontreal’scontributions,andthecontributionsofthebank’saffiliateswithoperationsinCanada,totheCanadianeconomyandsociety.ThissatisfiestherequirementsoftheCanadianfederalgovernment’sPublicAccountabilityStatementregulations(section459.3(1)oftheBank Act (Canada)).

Affiliates

ThefollowingaretheprescribedaffiliateswhoseactivitiesareincludedinthisPublicAccountabilityStatement.TheseaffiliatesaresubsidiariesoftheBankofMontrealwithlessthan$1billioninequity,exceptforoursecuritiesbroker,BMONesbittBurnsInc.,whichhasequityexceeding$1billion.

BMOAssetManagementInc.

BMOHarrisInvestmentManagementInc.

BMOInvestmentsInc.

BMOInvestorLineInc.

BMOLifeAssuranceCompany

BMOLifeInsuranceCompany

BMOMortgageCorp.

BMONesbittBurnsInc.1

BMOPrivateEquity(Canada)Inc.

BMOTrustCompany

1 BMONesbittBurnsLtéeamalgamatedwithBMONesbittBurnsInc.onNovember1,2012

Important Information

About this Report 2

Economic Impact 6

Access to banking services 7

Small business financing 7

Financial Literacy 26

Corporate Donations 27

Employee Giving (Volunteering) 28

List of Affiliates 55

Taxes Paid or Payable in Canada 56

BMO Financial Group Headcount 56

Branches opened and closed in fiscal year 2013 (Canada) 57

Branches relocated in fiscal year (Canada) 57

ATMs opened and closed in fiscal year 2013 (Canada) 58

Business Debt Financing 63

Bank of Montreal Mortgage Corporation

Public Accountability Statement 64

BMO Financial Group56 PublicAccountabilityStatement

Taxes Paid or Payable in Canada ($ millions)

Income taxes Capital taxes Other taxes

Federal 347.2 – 199.9

Province or territoryNewfoundlandandLabrador 1.5 2.6 2.0PrinceEdwardIsland 0.3 0.4 0.1NovaScotia 2.6 3.6 1.4NewBrunswick 1.8 1.9 0.6Quebec 39.5 9.1 37.1Ontario 143.5 – 180.3Manitoba 1.7 6.5 1.1Saskatchewan 1.9 6.0 0.5Alberta 8.9 – 2.3BritishColumbia 21.0 – 6.5Nunavut – – –NorthwestTerritories 0.1 – –Yukon 0.1 – –

Total provincial and territorial 222.9 30.1 231.9

Total 570.1 30.1 431.8

Income and capital taxes 600.2

Total taxes 1,032.0

BMO Financial Group Headcount

Active,paidandunpaidleaveemployeespermanent,casualandcontractAsatOctober31,2013

Province or territory Full-time Part-time Total

NewfoundlandandLabrador 219 68 287PrinceEdwardIsland 53 15 68NovaScotia 380 93 473NewBrunswick 256 78 334Quebec 4,158 904 5,062Ontario 18,824 1,865 20,689Manitoba 352 78 430Saskatchewan 368 134 502Alberta 1,956 459 2,416BritishColumbia 2,295 726 3,021NorthwestTerritories 20 6 26Yukon 8 7 15

Total Canada* 28,889 4,433 33,322

UnitedStates 13,511 1,637 15,148International 718 5 723

Total employees 43,118 6,075 49,193

BMOFinancialGroupisamajorCanadiantaxpayer.Infiscal2013,ouroveralltaxcontributionwas$1,032million.Thisamountincluded$570millioninincometaxesand$31millioninprovincialcapitaltaxes.Aswell,wepaid$432millioninothertaxes,including$262millioninHarmonizedSalesTax,GSTandothersalestaxes,$249millioninpayrolltaxes(employerportion),$37millioninpropertytaxesand$7millioninbusinesstaxesand$1millioninsundrytaxes.

*IncludesallemployeeswithaCanadiantaxlocation


Branches opened and closed in fiscal year 2013 (Canada)

BMO Bank of Montreal branches opened

Branch Name Address City/Province

Beauport 205Ave.Joseph-Casavant Beauport,QCTaschereau&Napoleon 8245Blvd.Taschereau Brossard,QCLachenaie 1141MonteedesPionniers Terrebonne,QCPointe-Nord 109ChemindelaPointeNord Verdun,QCHighway50&Ebenezer 8950Highway50 Brampton,ONMajorMackenzie&Markland 710MarklandStreet Markham,ONCornwall&Chartwell 475CornwallRoad Oakville,ONYonge&Gerrard 382YongeStreet Toronto,ONSeton 19489SetonCrescentSE Calgary,ABNewcastleCentre 16903127StreetNW Edmonton,ABKingsway&Salisbury 7075KingswayAvenue Burnaby,BCBlundellCentre 8180No.2Road Richmond,BC

BMO Bank of Montreal branches closed or consolidated

Branch Name Address City/Province

LongPondFinancialCentre 350ConceptionBayHighway ConceptionBaySouth,NLSpryfieldFinancialCentre 279HerringCoveRoad Halifax,NSBrossardFinancialCentre 3260Blvd.Lapiniere Brossard,QCChamblyFinancialCentre 3500Blvd.Frechette Chambly,QCSt-JeromeFinancialCentre 1005Blvd.GrandHeron St-Jerome,QCMarcheLorddeLafontaineFinancialCentre2012St.Georges St-Jerome,QCFaubourgSte-JulieFinancialCentre 2055RuePrincipale Ste-Julie,QCBarton&Victoria 281BartonSt.East Hamilton,ONDundas&Chestnut 180DundasSt.West Toronto,ON

Branches relocated in fiscal year 2013 (Canada)

Branch Name From To

LesTerrassesBoisbriand 384ChemindelaGrandeCote,Boisbriand,QC 2310DuFaubourgBlvd.,Boisbriand,QCChambly 1376RueBourgogne,Chambly,QC 3600Blvd.Frechette,Chambly,QCCharlesbourg 8535Blvd.HenriBourassa,Charlesbourg,QC 8400Blvd.HenriBourassa,Charlesbourg,QCPlaceAlexisNihon 1500AtwaterAve.,Montreal,QC 2163Ste-CatherineSt.West,Montreal,QCSt-Eustache 535ArthurSauveBlvd.,St-Eustache,QC 583ArthurSauveBlvd.,St-Eustache,QCEssex 38TalbotSt.North,Essex,ON 7TalbotSt.North,Essex,ONSpeedvale&Edinburgh 146SpeedvaleAve.West,Guelph,ON 43WoodlawnRd.West,Guelph,ONJames&Barton 303JamesSt.North,Hamilton,ON 275JamesSt.North,Hamilton,ONRoyalWindsor&Clarkson 2057RoyalWindsorDr.,Mississauga,ON 920SouthdownRoad,Mississauga,ONPortColborne 124ClarenceSt.,PortColborne,ON 287WestSideRoad,PortColborne,ONBridletowneCircle&EchoPoint 2122BridletowneCircle,Toronto,ON 2900WardenAve.,Toronto,ONYonge&St.Clair 1431YongeSt.,Toronto,ON 1560YongeSt.,Toronto,ONClearbrook 32112SouthFraserWay,Abbotsford,BC 3122Mt.LehmanRoad,Abbotsford,BC


ATMs opened and closed in fiscal year 2013 (Canada)

ATMs opened in fiscal year 2013 (Canada)

Location Address CityNewfoundland and LabradorLawtons 184MainStreet Springdale

Nova ScotiaSobeys 210WyseRoad Dartmouth

Prince Edward IslandFoodland 98WaterStreet Summerside

New BrunswickSobeys 10BoulevardSt-PierreEst CaraquetPharmaPlus 1MainStreet NashwaaksisMcAllisterPlaceSobeys 519WestmorlandRoad SaintJohn

QuebecShell 1181,avenueGilles-Villeneuve BerthiervilleBoulevardduFaubourg 2310,boulevardduFaubourg BoisbriandTaschereauetNapoléon 8245,boulevardTaschereau BrossardIGA 9105,boulevardTaschereau BrossardShell 1475,chemindeChambly CarignanChambly 1376,avenueBourgogne ChamblyIGA 110,boulevardNotre-Dame ClermontIGA 134,boulevardSaint-Michel Dolbeau-MistassiniIGA 885,boulevardFoucault DrummondvilleIGA 150,rueAngusSud EastAngusChomedey 1100,boulevardCuré-Labelle LavalIGA 1535,boulevardLeCorbusier LavalShell 595,boulevardLaval LavalIGA 2137,boulevardCuré-Labelle Laval(Chomedey)Shell 200,routeduPrésident-Kennedy LévisShell 5900,boulevardÉtienne-Dallaire LévisIGA 10760,avenueMillen MontréalDrummondetSainte-Catherine 1205,rueSainte-CatherineOuest MontréalTourIBMMarathon 1250,boulevardRéne-LévesqueOuest MontréalLeSéville 2163,rueSainte-CatherineOuest MontréalShell 9600,boulevardHenri-BourassaOuest Montréal(Saint-Laurent)ÎledesSœurs 38,placeduCommerce Montréal(Verdun)IGA 4,rueBridge OrmstownIGA 26,boulevarddesÎles Port-CartierIGA 1035,boulevardWilfrid-Hamel QuébecShell 720,boulevardLebourgneuf QuébecBeauport 205,avenueJoseph-Casavant Québec(Beauport)IGA 795,boulevardduLac Québec(Charlesboug)Charlesbourg 8400,boulevardHenri-Bourassa Québec(Charlesboug)IGA 315,rueValmont RepentignyIGA 240,avenueLarivière Rouyn-NorandaIGA 2020,route112 Saint-CésaireIGA 655,ruedelaVisitation Saint-Charles-BorroméeShell 569,ruePrincipale Sainte-Hélène-de-BagotSaint-Eustache 535,boulevardArthur-Sauvé Saint-EustacheSaint-Eustache 583,boulevardArthur-Sauvé Saint-EustacheIGA 1199,boulevardSaint-Félicien Saint-FélicienIGA 170,boulevardSaint-Luc Saint-Jean-sur-RichelieuIGA 130,cheminduLac-Millette Saint-SauveurIGA 850,7eAvenue Shawinigan(Grand-Mère)IGA 2240,rueKingEst SherbrookeIGA 50,rueBourgeoys SherbrookeIGA 1115,montéedesPionniers TerrebonneLachenaie 1141,montéedesPionniers TerrebonneIGA 249,boulevardHarwood Vaudreuil-Dorion

OntarioSobeys 372QueenStreetE ActonSobeys 955WestneyRoadS AjaxPharmaPlus 71SandwichStreetS AmherstburgRexall 22BaskinDriveE ArnpriorPharmaPlus 320BayfieldStreet BarriePharmaPlus 4486OntarioStreet BeamsvillePharmaPlus 173DundasStreetE BellevillePharmaPlus 405QueenStreetS BoltonBowmanville 2KingStreetW Bowmanville


Location Address CityPharmaPlus 55Highway118W BracebridgeSobeys 40MelbourneDrive BradfordPharmaPlus 10035HurontarioStreet BramptonPharmaPlus 18KensingtonRoad BramptonDaisyMart 3938CottrelleBoulevard BramptonPharmaPlus 398QueenStreetW BramptonDaisyMart 7980KennedyRoadS BramptonTimHortons 11SinclairBoulevard BrantfordDaisyMart 989WardStreet BridgenorthPharmaPlus 30PearlStreetW BrockvillePharmaPlus 2201BrantStreet BurlingtonRexall 2400GuelphLine BurlingtonPharmaPlus 5061NewStreet BurlingtonPharmaPlus 351ArgyleStreetS CaledoniaDaisyMart 21MckayStreet CambridgePharmaPlus 11ChamplainStreet DeepRiverCanadaSafeway 75WhyteAvenue DrydenMetro 119OslerDrive DundasRexall 60HattStreet DundasEssex 7TalbotStreetN EssexShoppersWorld 1530AlbionRoad EtobicokeSobeys 15LindsayStreet FenelonFallsRexall 67KingstonStreet GoderichSobeys 34LivingstonAvenue GrimsbyGrimsby 63MainStreetW GrimsbyWoodlawn&Woolwich 43WoodlawnRoadW GuelphRexall 224HighlandStreet HaliburtonRexall 126QueenstonRoad HamiltonJames&Colbourne 275JamesStreetN HamiltonPharmaPlus 447MainStreetE HamiltonRexall 505RymalRoadE HamiltonRexall 930UpperParadiseRoad HamiltonRexall 76ArlingtonDrive KeswickRexallPharmaPlus 817EdgarStreet KingstonPharmaPlus 537FrederickStreet KitchenerPharmaPlus 696BelmontStreetW KitchenerLeamington 297ErieStreetS LeamingtonPharmaPlus 401KentStreetW LindsayPharmaPlus 51KentStreetW LindsayMetro 1030AdelaideStreetN LondonFoodBasics 1225WonderlandRoadN LondonPharmaPlus 1505HighburyAvenueN LondonMetro 155ClarkeRoad LondonRexall 1551DundasStreetE LondonPharmaPlus 1795ErnestAvenue LondonBMOCentre 295RectoryStreet LondonMetro 301OxfordStreetW LondonMetro 395WellingtonRoad LondonPharmaPlus 611WonderlandRoadN LondonPharmaPlus 740HydeParkRoad LondonDaisyMart 774SouthWenigeDrive LondonPharmaPlus 1160BeaverwoodRoad ManotickMajorMackenzie&Markland 710MarklandStreet MarkhamPharmaPlus 6541DerryRoad MiltonRoseboroughCentreDominion 1240EglintonAvenueW MississaugaPharmaPlus 1375SouthdownRoad MississaugaDaisyMart 1525BristolRoadW MississaugaClarkson 2057RoyalWindsorDrive MississaugaPharmaPlus 3010ThomasStreet MississaugaDerry&10thDominion 3221DerryRoadW MississaugaPharmaPlus 377BurnhamthorpeRoad MississaugaMichaelAngelos 4099ErinMillsParkway MississaugaClarksonCrossing 920SouthdownRoad MississaugaRexall 470CentreStreetN NapaneeRexall 144RobertsonRoad NepeanRexall 1595MerivaleRoad NepeanSobeys 3714PortageRoad NiagaraFallsPharmaPlus 6484LundysLane NiagaraFallsPharmaPlus 1205FisherStreet NorthBaySobeys 1899AlgonquinAvenueN NorthBayCornwall&Chartwell 475CornwallRoad OakvillePharmaPlus 523MapleGroveRoad OakvilleMetro 150FirstStreet Orangeville


Location Address CityPharmaPlus 438KingStreetW OshawaPharmaPlus 1190WellingtonStreet OttawaPharmaPlus 1363WoodroffeAvenue OttawaPharmaPlus 1615OrleansBoulevard OttawaSeptIlesLoblaws 1910St-LaurentBoulevard OttawaPharmaPlus 200RideauStreet OttawaPharmaPlus 2121CarlingAvenue OttawaPharmaPlus 2269RiversideDriveE OttawaWestboro 288RichmondRoad OttawaPharmaPlus 2950CarlingAvenue OttawaKanataPharmaPlus 4048CarlingAvenue OttawaPharmaPlus 753MontrealRoad OttawaPharmaPlus 900GreenbankRoad OttawaPharmaPlus 15079thAvenueE OwenSoundPharmaPlus 963SecondAvenueE OwenSoundPharmaPlus 72GrandRiverStreetN ParisPharmaPlus 1100PembrokeStreetE PembrokePharmaPlus 215PembrokeStreetE PembrokePharmaPlus 1011VictoriaStreet PetawawaSobeys 501TowerhillRoad PeterboroughPharmaPlus 97MainStreet PictonPortColborne 124ClarenceStreet PortColborneRexall 466GoderichStreet PortElginPharmaPlus 339RaglanStreetS RenfrewRexall 697CathcartBoulevard SarniaPharmaPlus 129TrunkRoad SaultSte.MarieRexall 13SecondLineW SaultSte.MariePharmaPlus 1127MarkhamRoad ScarboroughRexall 1925VictoriaParkAvenue ScarboroughMetro 2900WardenAvenue ScarboroughPharmaPlus 3607SheppardAvenueE ScarboroughPharmaPlus 2BeckwithStreetN SmithsFallsPharmaPlus 174AlbertStreetS SouthamptonPharmaPlus 258LakeStreet St.CatharinesSobeys 19AmyCroftDrive St.ClairBeachSobeys 30QueenslandRoad StratfordPharmaPlus 117BCedarStreet SudburyRexall 1975BancroftDrive SudburyPharmaPlus 555BarrydownRoad SudburyRexall 848LasalleBoulevard SudburyThePromenade 1PromenadeCircle ThornhillPharmaPlus 1115WilsonAvenue TorontoPharmaPlus 1245DupontStreet TorontoUniversityofToronto–VictoriaCampus 150CharlesStreetW TorontoYonge&St.Clair 1560YongeStreet TorontoFairbank 1901EglintonAvenueW TorontoMetroCentre 200WellingtonStreetW TorontoMetro 2300YongeStreet TorontoPharmaPlus 2409DufferinStreet TorontoPharmaPlus 288SheppardAvenueE TorontoPharmaPlus 3555DonMillsRoad TorontoRexall 3701LakeshoreBoulevard TorontoYonge&Gerrard 382YongeStreet TorontoUniversity&Dundas 438UniversityAvenue TorontoPharmaPlus 4459KingstonRoad TorontoPharmaPlus 4890DundasStreetW TorontoRogersRoad 605RogersRoad TorontoPharmaPlus 660EglintonAvenueE TorontoPharmaPlus 777BayStreet TorontoPharmaPlus 109DundasStreetE TrentonRexall 2ElginParkDrive UxbridgeRexall 3080Highway69N ValCaronPharmaPlus 440JamesStreet WallaceburgUniversityShopsPlaza 170UniversityAvenueW WaterlooPharmaPlus 425UniversityAvenueE WaterlooPharmaPlus 200FitchStreet WellandRexall 1215OuelletteAvenue WindsorRexall 1700HuronChurchRoad WindsorRexall 3840HowardAvenue WindsorFreshco 5840MaldenRoad WindsorSobeys 7676TecumsehRoadE WindsorRexall 706DundasStreet Woodstock


Location Address CityManitobaCanadaSafeway 161018thStreet BrandonCanadaSafeway 318ManitobaAvenue SelkirkPharmaPlus 366MainStreet SelkirkCanadaSafeway 143ProvincialTrunkHwy(Hwy12N) SteinbachCanadaSafeway 300MysteryLakeRoad ThompsonFortGarry 1188PembinaHighway WinnipegCanadaSafeway 1612NessAvenue WinnipegPharmaPlus 1795HendersonHighway WinnipegPharmaPlus 2305PortageAvenue WinnipegCanadaSafeway 2860PembinaHighway WinnipegCanadaSafeway 3393PortageAvenue WinnipegCharleswoodCentre 3900GrantAvenue WinnipegSafeway 499RiverAvenue WinnipegSobeys 50KildonanGreenDrive WinnipegSobeys 50SageCreekBoulevard WinnipegPharmaPlus 676PortageAvenue WinnipegCanadaSafeway 77VermillionRoad WinnipegCanadaSafeway 850KeewatinStreet WinnipegPharmaPlus 971CorydonAvenue Winnipeg

SaskatchewanIGA 17198thAvenue HumboldtPharmaPlus 420AlbertStreet ReginaRexall 153020thStreetW SaskatoonPharmaPlus 780CentralAvenueN SwiftCurrent

AlbertaRexall 3StonegateDriveN AirdrieRexall 317BanffAvenue BanffRexall 591050thStreetNW BeaumontCanadaSafeway 550CassilsRoadW BrooksRexall 1110PanatellaBoulevardNW CalgarySobeys 11300TuscanyBoulevardNW CalgarySuperDrugMart 11625ElbowDriveSW CalgarySuperDrugMart 144052ndStreetNE CalgaryCanadaSafeway 160090thAvenueSW CalgarySeton 19489SetonWaySE CalgaryEauClaireMarket 200BarclayParadeSW CalgarySuperDrugMart 555StrathconaBoulevardSW CalgarySuperDrugMart 70HighStreetSE CalgaryRexall 81719thStreetNE CalgaryPharmaPlus 9650HarvestHillsBoulevardN CalgaryCanadaSafeway 680048thAvenue CamroseSobeys 65BowStreet CochraneLondonderryMall 1LondonderryMallNW EdmontonRexall 1015550thStreetNW EdmontonSobeys 1030WebberGreensDriveNW EdmontonRexall 10818JasperAvenueNW EdmontonRexall 11811JasperAvenueNW EdmontonRexall 14403MillerBoulevardNW EdmontonRexall 1670382ndStreetNW EdmontonNewcastleCentre 16903127thStreetNW EdmontonRexall 9540163rdStreetN EdmontonCanadaSafeway GroatRoadNW&111AvenueNW EdmontonRexall 116TownCrestRoad FortSaskatchewanSafeway 8060100thStreet GrandePrairieCanadaSafeway 9925114thAvenue GrandePrairieHighLevel 9910100thAvenue HighLevelRexall 500453rdAvenue HighPrairieRainbowEsso 70111thAvenueSE HighRiverRexall 602PatriciaStreet JasperRexall 501053rdStreet LacombeRexall 500650thStreet MayerthorpeCanadaSafeway 615DivisionAvenueSE MedicineHatSuperDrugMart 300VillageAvenue OkotoksRexall 789MainStreet PincherCreekRexall 101BremnerDrive SherwoodParkCanadaSafeway 985FirStreet SherwoodParkRexall 480150thAvenue StonyPlainRexall 463150thStreet SylvanLakeRexall 470550thAvenue ValleyviewRexall 470251stStreet Whitecourt

61 PublicAccountabilityStatement

BMO Financial Group

Location Address CityBritish ColombiaHighStreet 3122MountLehmanRoad AbbotsfordKingsway&Salisbury 7075KingswayAvenue BurnabyPharmaPlus 418YellowheadHighway BurnsLakeRexall 1604CliffeAvenue CourtenayThriftyFoods 444LerwickRoad CourtenayCanadaSafeway 112008thStreet DawsonCreekCanadaSafeway 181TransCanadaHighway DuncanCanadaSafeway 9123100thStreet FortSt.JohnPharmaPlus 1801Princeton-KamloopsHighway KamloopsThompsonRiversUniversity 900McGillRoad KamloopsRexall 171HollywoodRoadS KelownaTownsiteGrocery 4864thAvenue KimberleyRexall 1750DufferinCrescent NanaimoBlundellCentre 8180No.2Road RichmondRexall 17475Highway10 SurreyCanadaSafeway 1766RobsonStreet VancouverCanadaSafeway 2733WestBroadway VancouverRexall 4898MainStreet VancouverPharmaPlus 88WestPenderStreet VancouverRexall 1151AdmiralsRoad VictoriaCanadaSafeway 3958ShelbourneStreet VictoriaRexall 912DouglasStreet VictoriaRexall 2241LouieDrive WestbankPharmaPlus 4212VillageSquare Whistler

ATMs closed in fiscal year 2013 (Canada)

Location Address CityQuebecLesTerrassesBoisbriand 384CheminDeLaGrandeCote BoisbriandChambly 3600BoulevardFrechette ChamblyCharlesbourg 8535BoulevardHenri-Bourassa CharlesbourgIGA 35RuePrincipaleE CookshireIGA 13057BoulevardGouinOuest PierrefondsSaintEustache 535BoulevardArthur-Sauve Saint-EustacheDepanneurLeMagasin 204Route138 SaintAugustin-Desmaures

OntarioNorthBradfordCentre 305BarrieStreet BradfordEssex 38TalbotStreetN EssexSpeedvale&Edinburgh 146SpeedvaleAvenueW GuelphBarton&Victoria 281BartonStreetE HamiltonJames&Barton 303JamesStreetN HamiltonMarkhamMews 5051Highway7 MarkhamClarkson 2057RoyalWindsorDrive MississaugaPembroke 41PembrokeStreetW PembrokePortColborne 124ClarenceStreet PortColborne16th&Spadina 1SpadinaRoad RichmondHillSt.George 9BeverleyStreetW St.GeorgeFirstCanadianPlace 100KingStreetW TorontoYonge&St.Clair 1431YongeStreet TorontoDundas&Chestnut 180DundasStreetW TorontoMetro 2900WardenAvenue Toronto

ManitobaSobeys 839CavalierDrive Winnipeg

AlbertaMillwoods 550323rdAvenue EdmontonFortMcMurray 9920FranklinAvenue FortMcMurraySobeys 502849thAvenue Redwater

British ColombiaClearbrook 32112SouthFraserWay AbbotsfordBlundellCentre 6140BlundellRoad Richmond

62 PublicAccountabilityStatement


Business Debt Financing as at October 31, 2013 (amounts in $ millions)

Provinces and ($ millions) $0–$24,999 $25,000– $100,000– $250,000– $500,000– $1,000,000– $5,000,000 TOTAL Territories $99,999 $249,999 $499,999 $999,999 $4,999,999 & greater

Newfoundland AuthorizedAmount 13 21 37 63 103 334 441 1,012andLabrador NumberofFirms 1,556 477 230 187 150 171 29 2,800

PrinceEdward AuthorizedAmount 4 8 21 36 66 193 124 452Island NumberofFirms 500 173 127 99 98 91 9 1,097

NovaScotia AuthorizedAmount 22 31 69 122 232 629 2,181 3,286 NumberofFirms 2,677 718 437 400 348 319 87 4,986

NewBrunswick AuthorizedAmount 17 25 45 77 122 383 742 1,411 NumberofFirms 2,120 587 279 221 178 184 30 3,599

Quebec AuthorizedAmount 197 197 312 560 834 2,251 15,451 19,802 NumberofFirms 23,783 4,906 2,066 1,931 1,514 1,087 477 35,764

Ontario AuthorizedAmount 497 598 837 1,214 1,802 6,038 36,262 47,249 NumberofFirms 82,768 14,552 5,523 3,638 2,757 2,921 1,245 113,404

Manitoba AuthorizedAmount 27 37 37 62 100 433 2,901 3,596 NumberofFirms 3,270 962 234 183 151 198 70 5,068

Saskatchewan AuthorizedAmount 43 77 101 146 221 537 2,382 3,506 NumberofFirms 4,797 1,906 647 414 326 276 85 8,451

Alberta AuthorizedAmount 180 185 216 349 578 2,226 19,774 23,508 NumberofFirms 20,232 4,859 1,382 1,017 862 1,043 539 29,934

BritishColumbia AuthorizedAmount 166 175 238 401 725 3,020 12,808 17,533 NumberofFirms 18,850 4,457 1,542 1,168 1,059 1,402 503 28,981

Yukon AuthorizedAmount 1 2 3 9 12 26 0 54 NumberofFirms 137 48 20 25 17 9 0 256

NorthwestTerritories/ AuthorizedAmount 1 1 2 2 8 9 16 39Nunavut NumberofFirms 103 34 14 6 12 4 1 174

Total Authorized Amount 1,170 1,360 1,918 3,040 4,802 16,078 93,082 121,449 Number of Firms 160,793 33,679 12,501 9,289 7,472 7,705 3,075 234,514

BMO Financial Group64 BankofMontrealMortgageCorporationPublicAccountabilityStatement

Bank of Montreal Mortgage Corporation Public Accountability Statement*

Duetothespecificnatureofitsactivities,BankofMontrealMortgageCorporation(BMMC)providesthefollowinginformationinresponsetotherequirementssetoutinsection444.2(1)ofthe Trust and Loan Companies Act andintheapplicableregulations.

BMMC,awhollyowned,fullyintegratedsubsidiaryofBankofMontreal,raisesfundsformortgagefinancingbyissuingdepositinstruments(suchasGICs)throughBankofMontreal’sretailbranchnetworkandotherproprietarychannels,whereBankofMontrealactsforBMMC,aswellasthroughthird-partychannels.BMMCdoesnotoperatebranchesthatareopentothepublicorotherfacilitiesatwhichdepositsareacceptedorcashisdistributedtocustomers.BMMCemploys15full-timeemployees.TheseemployeesarebasedinMontreal.

TheincomeandcapitaltaxespaidinCanadabyBMOFinancialGroup,ofwhichBMMCisamember,arelistedonpage56ofBMOFinancialGroup’s2013Environmental,SocialandGovernance(ESG)ReportandPublicAccountabilityStatement.

BMMCsharesBMO’scommitmenttocommunitydevelopmentandphilanthropicactivityasdescribedinBMOFinancialGroup’s2013ESGReportandPublicAccountabilityStatement.ThecommunitydevelopmentactivitiesofBMMC’semployeesareintegratedwiththoseofBMOFinancialGroupanditsemployees,asdescribedinBMOFinancialGroup’s2013ESGReportandPublicAccountabilityStatementonpages26and28.

AsdetailedinBMOFinancialGroup’s2013ESGReportandPublicAccountabilityStatement,businessdebtfinancingandprogramstoimproveaccesstofinancialservicesareengagedinbyBankofMontrealforBMOFinancialGroup.BMMChasnootheraffiliatesinrespectofwhichthisPublicAccountabilityStatementispublished.

* AsstipulatedbytheTrust and Loan Companies Act,BankofMontrealMortgageCorporation,whollyownedbyBankofMontreal,isrequiredtopublishaseparatePublicAccountabilityStatement.

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