Canadian Imperial Bank of Commerce (CIBC) | Interfaith Center on Corporate Responsibility

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<h4>Resolution Details</h4>
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<strong>Company:</strong>
<p>Canadian Imperial Bank of Commerce (CIBC)</p>
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<strong>Year:</strong>
<p>2025 </p>
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<strong>Issue Area:</strong>
<p>Climate Change, Environment </p>
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<strong>Focus Area:</strong>
<p>Climate Financing </p>
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<strong>Status:</strong>
<p>Filed</p>
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<h2>Resolution Text</h2>
<p><strong>Resolved: </strong>Shareholders request that CIBC disclose, at reasonable cost and omitting proprietary information, 1) industry specific scoring metrics for clients classified in the carbon risk scoring categories and 2) industry specific client transition plans with procedures to ensure these transition plans are aligned with CIBC’s 2030 interim targets to reduce financed emissions.</p>
<p class=”p1″><strong>Supporting statement: </strong>Climate change is a global crisis requiring urgent action. Exceeding a 1.5°C warming scenario presents risks to the planet, economies, investors, and ultimately to the long-term</p>
<p class=”p2″>profitability of banks: projections have found that limiting global warming to 1.5° degrees could save $20 trillion globally by 2100, while exceeding 2 degrees could lead to climate damages in the hundreds of</p>
<p class=”p3″>trillions.1 Estimates show that 10% of global economic value stands to be lost by 2050 under current emissions trajectories.2</p>
<p class=”p4″>Reflecting this, CIBC states that climate change poses a significant risk to its business and recognizes the financial sector is uniquely positioned to make positive change for the climate.3 Investors strongly agree with this sentiment and believe the bank can be a global leader in this respect.</p>
<p class=”p5″>As indicated by CIBC, the bank’s ability to meet its net-zero target relies on disclosing and reducing financed emissions. Publishing emissions data associated with automotive, power generation, oil & gas, commercial real estate, residential mortgages, motor vehicle loans, and agriculture lending is a positive step.4 CIBC’s associated 2030 interim targets for oil & gas, power generation, and automotive reinforces the bank’s commitment to climate action.</p>
<p class=”p6″>Despite this, investors are left with significant uncertainty regarding CIBC’s strategy to meet these targets and thrive in a carbon constrained economy. Investors lack key information such as definitive rubrics for sectors with targets, target setting timelines for additional sectors’ financed emissions, and a clearly outlined support and consequence path for clients ranked in Carbon Scoring Categories. While CIBC has referenced communication of interim financed emissions targets with clients, investors continue to lack clarity on how expectations and standards are conveyed, and how climate ambitions influence the lending process.</p>
<p class=”p7″>Several of CIBC’s peers provide more clarity on how they are implementing transition plans. For instance, RBC has disclosed assessment frameworks adapted for sectors with interim targets.5 Australia and New Zealand Banking Group publishes client ratings movements and whether a sector is on track or not to</p>
<p class=”p3″>meet the associated targets.6 Standards and guidelines exist to help financial institutions and their clients operationalize net zero commitments and can help ensure investors that CIBC has appropriate strategies in place to meet 2030 targets.</p>
<p class=”p4″>From an investor vantage point, failing to set these expectations exposes CIBC to material financial risks, including but not limited to: significant counterparty risk due to stranded assets, declining credit quality, increased risk in other portfolios, and loss of goodwill. The disclosures requested in this proposal will help assure investors that CIBC has effective and accountable client transition plans in place for achieving 2030 emissions reduction goals.</p>
<p class=”p1″>1 https://www.nature.com/articles/d41586-018-05219-5</p>
<p class=”p2″>2 https://www.swissre.com/institute/research/topics-and-risk-dialogues/climate-and-natural-catastrophe-risk/expertise-publication-economics- of-climate-change.html</p>
<p class=”p3″>3  https://www.cibc.com/content/dam/about_cibc/corporate_responsibility/pdfs/cibc-sustainability-report-2023-en.pdf</p>
<p class=”p4″>4 https://www.cibc.com/content/dam/about_cibc/corporate_responsibility/pdfs/climate-report-2023-en.pdf</p>
<p class=”p2″>5 https://www.rbc.com/our-impact/_assets-custom/pdf/rbc-client-engagement-approach-en.pdf</p>
<p class=”p2″>6 https://www.anz.com.au/content/dam/anzcomau/about-us/anz-2023-climate-related-financial-disclosures.pdf</p>

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<h3>Lead Filer</h3>
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<div class=”views-field views-field-nothing”><span class=”field-content”> Morrigan Simpson-Marran</span></div><div class=”views-field views-field-title views-field-field-shareholder”><span class=”field-content”>Vancity Investment Management</span></div>
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Resolution Details

Company:

Canadian Imperial Bank of Commerce (CIBC)

Year:

2024

Issue Area:

Corporate Governance

Focus Area:

Executive Compensation

Status:

Filed

Resolution Text

BE IT RESOLVED

The Board of Directors undertake a review of executive compensation levels in relation to the entire workforce and, at reasonable cost and omitting proprietary information, publicly disclose the CEO- compensation-to-median-employee-pay-ratio on an annual basis.

SUPPORTING STATEMENT

Job action by United Auto Workers and Hollywood talent illustrates the employee unrest impacting many industries and underscores the discrepancy between corporate profits and increased executive pay compared to workers’ trailing wages. Exacerbating this unrest is stagnant wage growth combined with rising inflation, particularly impacting necessities like housing, energy, and food1.

Sluggish wage growth trailing inflation for average employees is in stark contrast to executive compensation, where realized wages have continued to exceed inflation and diverge from the rest of the workforce. This data is widely available, and this growing gap is undisputed.

While companies with lower levels of unionization are less exposed to direct labour action, they are still exposed to similar financial impacts. This is often felt through increased employee turnover, absenteeism, and lowered employee morale. For instance, research has shown that a burnt-out employee can incur a cost equivalent to over 30% of their salary and that replacing an existing employee can cost up to 400% of their annual salary2.

To effectively implement strategies that increase company value, senior executives need engaged employees to execute their vision. Many studies show that social comparison is a powerful factor in human interaction and employee satisfaction is heavily dependent on perceived fairness in compensation3.

The perception that only executives benefit from company growth and that the average worker is not fairly compensated for their individual contribution is demotivating for employees. The CEO- compensation-to-median-employee-pay-ratio is a useful mechanism to evaluate and assess wage distributions within a company. When pay differentials are closely monitored and managed, employees are more likely to be highly engaged and productive.

Say-on-pay vote results have very little to do with a company’s management of pay differentials. Shareholders are lacking information on how exposed CIBC is to human capital risks associated with skewed compensation distributions. Vancity filed this proposal last year and received 10% support. MEDAC previously filed a similar proposal with CIBC, indicating there is demand for this information.

As a financial institution, CIBC is heavily dependent on human capital to drive growth and in turn, shareholder value. The CEO-compensation-to-median-employee-pay-ratio provides a simple cost- effective way for CIBC to communicate how the company manages pay differentials. Scotiabank provides this ratio and the Global Reporting Initiative, which CIBC already utilizes, offers a well-recognized method to calculate this through indicator 2-21.

The aim of this disclosure is not to limit executive compensation but to ensure that shareholders have the appropriate information to evaluate CIBC’s management of human capital risks. Disclosing and tracking the ratio will allow CIBC to better manage employee engagement and morale, talent recruitment and retention and mitigate the increasing financial and reputational risk associated with growing pay differentials.

1 https://www.forbes.com/sites/annefield/2022/05/23/ceo-worker-pay-gap-widens-and-employees-arent-happy-about-it/?sh=3ac80050142c

2 https://www.joinpavilion.com/blog/the-real-cost-of-burnout; https://www.simplybenefits.ca/blog/employee- retention-what-is-the-true-cost-of-losing-an-employee

3 https://www.psychologytoday.com/ca/blog/work-smarter-not-harder/202303/the-executive-worker-pay-gap-isnt-without-consequences

Resolution Details

Company:

Canadian Imperial Bank of Commerce (CIBC)

Year:

2023

Issue Area:

Inclusiveness

Focus Area:

Racial Justice, Workplace Equity

Status:

Filed

Vote Percentage:

Resolution Text

RESOLVED, shareholders request the Canadian Imperial Bank of Commerce (“CIBC”) to conduct and publish (at reasonable cost and omitting proprietary information) a third-party racial equity audit analyzing CIBC’s adverse impacts on non-white stakeholders and communities of colour. Input from civil rights organizations, employees, and customers should be considered in determining the specific matters to be analyzed.

Supporting Statement

As critical intermediaries, financial institutions play a key role in the society as they allow businesses and individuals to access essential economic opportunities through a broad range of financial products and services, including facilitating transactions, providing credit and loan services, savings accounts, and investment management. Because of the important role that financial institutions play in our economy and society, such institutions have a responsibility to ensure that their business operations, practices, policies and products and services do not have adverse impacts on non-white stakeholders and communities of colour.

A report from the Financial Consumer Agency of Canada studying frontline practices of six Canadian banks, including CIBC, suggests that racialized or Indigenous bank customers are subjected to discriminatory practices.1 Compared to other customers, visible minorities and Indigenous customers were more likely recommended products that were not appropriate for their needs, were not presented information in a clear and simple manner and were offered optional products, such as overdraft protection and balance protection insurance.

A December 2020 academic review commissioned by the British Columbia Securities Commission found estimates of unbanked Canadians (no official relationship with a bank) ranged from 3%-6%, and underbanked Canadians (who rely on fringe financial institutions like payday lenders) ranged from 15%- 28%.2 The review found that under/unbanking has a disproportionate effect on Indigenous peoples, and that “financial access has been cited by researchers as an endemic problem in ‘low-income communities of color’.”

Canadian financial institutions, including CIBC, have a responsibility to address financial discrimination and provide greater access to credit and other financial services to ensure all communities become economically resilient.

CIBC’s current Inclusion and Diversity Strategy (“Strategy”) is insufficient in identifying or addressing potential and existing racial equity issues stemming from its practices, policies, products, and services as it primarily focuses on diversity, equity, and inclusion initiatives.

Racial equity issues present significant legal, financial, regulatory, and reputational business risks to the Company and its shareholders. A racial equity audit will help CIBC identify, prioritize, remedy, and avoid adverse impacts on non-white stakeholders and communities of colour. Therefore, we urge CIBC to assess its behaviour through a racial equity lens in order to obtain a complete picture of how it contributes to, and could help dismantle, systemic racism.

1 https://www.canada.ca/en/financial-consumer-agency/programs/research/mystery-shopping-domestic-retail- banks.html
2 https://bcbasicincomepanel.ca/wp- content/uploads/2021/01/Financial_Inclusion_in_British_Columbia_Evaluating_the_Role_of_Fintech.pdf

Disclose Carbon Risk Categories and Transition Plans

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