Shareholder resolution calls for Bank of Montreal to stop financing fossil fuels

  • Picket at PRI Conference, 2018-09-12. Photo credit: Steve Nadel.

On Tuesday, March 31, the Bank of Montreal (BMO) shareholder meeting will include a shareholder resolution calling for the bank to make a commitment to exclude or phase out financing for fossil fuels–including coal–in view of the “incongruities” between such financing and BMO’s public positions supporting sustainability. The resolution comes from John Harrington of Harrington Investments (HII), a socially responsible financial manager and NCIO supporter. For several years, NCIO waged a campaign to persuade the bank to drop its efforts to attract investment in an Oakland coal terminal, Oakland Bulk and Oversized Terminal (OBOT). NCIO is grateful to Harrington and HII for taking the steps to initiate this resolution. 

In April 2017, HII bought 100 shares of BMO, which qualified them to submit a shareholder resolution provided that the stock was held for one year. On Nov 1, 2019 HII submitted such a shareholder resolution, which is linked here. It states:

Shareholders request that our Board of Directors assess the incongruities of our bank’s lending history and financing criteria regarding fossil fuel loans and public statements regarding sustainability and climate change and make recommendations to shareholders on how to bring the company’s policies, practices and statements into better alignment. 

This year’s annual shareholder meeting, which will consider the HII resolution, will be held and broadcast online on Tuesday, March 31, 2020, at 6:30 AM Pacific Daylight Time (PDT). It can be viewed by clicking the “Webcast” link at Registration is required. The direct link to the webcast page (where there is a button for pre-registration) is — and while we are uncertain whether non-shareholders will have access to this livestream broadcast, it appears that anyone can register with a name and e-mail address. The statement that will be read in support of the resolution can be accessed here.

HII views this shareholder resolution as a response not only to the community threat to Oakland posed by dirty coal, but to the existential global threat of continued massive bank financing of fossil fuel expansion in North America, and its impact on human and indigenous peoples’ rights.

Status of BMO investment

In March 2018, NCIO launched an extensive campaign highlighting the contradiction between pursuing financing for coal at OBOT and the bank’s professed commitment to sustainability. As far as we can tell, BMO is no longer pursuing this investment. Our activism may have led BMO to conclude that the terminal is not a good investment, but we cannot expect them to admit our impact; in its correspondence with NCIO, BMO declared that it would not acknowledge whether or not it was pursuing obtaining investments in OBOT

All indications are that the coal developers are looking elsewhere for funding, as documents in the bankruptcy of Insight Terminal Solutions name other potential funders and don’t mention BMO. NCIO is now organizing to dissuade these other institutions from investing in OBOT as long as it proposes and prepares to handle coal. The BMO shareholder resolution can be a model for similar actions with these corporations–or for campaigns against other fossil fuel investments.

Shareholder Resolutions 

HII is a 38-year old family-owned business based in Napa that manages assets for individuals and institutions. HII not only screens portfolios for social and environmental concerns but engages in aggressive shareholder advocacy on such issues. In the 2020 proxy season, HII has filed or co-filed 17 shareholder resolutions, on a range of issues. In addition to targeting BMO, HII is pursuing Bank of Nova Scotia, which is involved in Dakota Access Pipeline funding. 

Shareholder resolutions have been an important form of activist democracy within corporations, allowing shareholders to promote more progressive directions for the businesses in which they own shares. This mechanism is currently at risk of becoming more difficult to implement. At the insistence of the Business Roundtable, the Chamber of Commerce and the Association of Manufacturers, the Trump-appointed Securities and Exchange Commission (SEC) has recently proposed new rules to throttle free speech of progressive shareholders by raising the value of the amount of stock a shareholder must own to introduce a proposal and raising all of the voting thresholds necessary to allow a resolution to be reintroduced. 

Alerted to this by John Harrington, NCIO has gone on record opposing the new SEC proposed rules. HII is committed to continuing to expand its advocacy and engagement for all stakeholders. NCIO is grateful for this mission and for HII’s collaboration with our campaign against BMO’s support for OBOT.


UPDATE: NCIO’s Misao Brown watched the webcast of Bank of Montreal’s Annual General Meeting (AGM). She reports that the Harrington Investments statement of support for the resolution to phase out fossil-fuel investment was read, but that BMO’s management recommended rejection. Unfortunately, voting shareholders followed the bank management’s recommendation: 89.3% voted against the resolution, 10.2% in favor, and less than 1% abstaining. Given the management stance, it is heartening that a significant fraction of shareholders voted in support of the resolution. However, in response to a shareholder question about the bank’s position on fossil fuel companies, BMO’s management asserted emphatically that the bank will continue its commitment to support fossil fuel companies. 

John Harrington of HII responded to the vote optimistically: “We received over 10% which is a big vote on a first year resolution. Under current SEC rules, in the US, we have to receive no less than 3% to reintroduce the same resolution the second year in a row. With the company controlling all the proxy solicitation and holding big insider stock positions, this represents a significant victory in a large Canadian financial institution. We can certainly reintroduce it next year, and with the petroleum industry beaten up and oil prices dropping to $21.25 per barrel from a high of over $100, the bank is in deep trouble. The Canadian economy is almost totally dependent upon extractive industries and they are trapped by their reliance upon fossil fuel financing. All of the Canadian banks are in the same deep oil and coal pool which is destroying the planet and endangering humanity’s existence. Management must say they support fossil fuels because they are financially beholden to the industry. Canadian law is much different: Canada does not have an SEC, but the companies have more flexibility in dealing with shareholders.”


The photo at the top of this post depicts No Coal activists and supporters holding a spirited demonstration in San Francisco on September 12, 2018 outside a meeting of the organization Principles for Responsible Investment (PRI), which promotes socially-responsible investment. NCIO called this demonstration to alert investors that the Bank of Montreal (BMO) may try to invite them to invest in waterfront “infrastructure” that is actually the proposed Oakland coal terminal. Photo credit: Steve Nadel.