Scotiabank has long championed a variety of environmental, social and governance (ESG) priorities in its business and considers walking the talk to be crucial in its home region. For its continued commitment to doing things right, Scotiabank is North America’s best bank for corporate responsibility.
The past year was a landmark for Scotiabank’s approach to ESG initiatives, which it groups around the four pillars of environmental action, economic resilience, inclusive society, and leadership and governance. Overlaid onto those is a three-level implementation process, starting with the bank’s own operations, then its relationship with its customers and finally with the world at large.
For Meigan Terry, who has been leading the bank’s ESG strategy since she joined Scotiabank in 2018, one of the biggest indicators of progress, ironically, is the fact that the bank has removed one of its most obvious ESG elements.
“If we are doing it right, we are moving away from having a standalone ESG strategy that we create in a separate realm, and instead integrating it completely into the business strategy,” she says. “This year, we actually stood down our broader ESG committee and instead stood up more specific steering committees, like our climate transition steerco that is co-lead with our business lines.”
For Terry, 2023 was the year in which Scotia achieved that goal of integrating ESG thinking into the fabric of the bank. The way she tells it, the bank has become much more surgical about how it implements all aspects of corporate responsibility, with business-line leaders now having personal goals tied to the firm’s commitments, as well as to allyship and diversity objectives.
This has not just happened in the last 12 months; it has been a steady process over several years. But Terry says the bank’s approach is maturing now, and these issues are now built into the business itself.
“Every single one of our operating committees reporting to our chief executive has a goal relating to our social, our diversity and our climate goals, and their business lines are now incorporating that.”
The obvious challenge in having the bank’s ESG efforts be less self-contained is maintaining focus and coordination. That is achieved by ensuring representation of all parts of the firm on the relevant new committees, like the climate transition steering committee.
But there is an important difference in presentation. In the past, a typical ESG committee meeting might have involved Terry updating colleagues on what was going on. Now it involves the business lines themselves reporting back on their own efforts to meet the institution’s goals.
In all this, the arrival from outside the bank of Scott Thomson as Scotiabank’s chief executive in January 2023 has added its own dynamic. As part of Thomson’s push to improve shareholder returns, he has put in place a new strategy that scrutinizes everything through an enterprise-wide lens.
That is quite helpful to the approach that Terry describes, since it hard-codes into the organization the need to consider all the firm’s institutional goals as goals for every one of its businesses, rather than existing somehow independently of them.
Employees of Scotiabank tell executives that the sense of belonging and social impact is a differentiator at the bank. Allyship is a critical part of that diversity and inclusion story. The bank held its second global allyship summit in 2023, with some 5,000 employees involved.
For Meigan Terry, 2023 was the year in which Scotia achieved that goal of integrating ESG thinking into the fabric of the bank
It added an allyship category to its employee-recognition platform, whereby staff can recognize the actions of their own colleagues. Some 34,000 allyship-related recognitions in 2023 are testament to that.
The bank has set itself goals to improve the diversity of its workforce by 2025, including doubling the proportion of indigenous employees, increasing the representation of people of colour in senior leadership roles to 30% or more and increasing the number of women in similar roles to 40%.
In 2023, the bank put C$8 billion ($5.8 billion) of capital to work in women-led businesses in Canada, and is well on the way to its C$10 billion goal by 2025.
In its climate efforts, the bank upped a number of its targets, including pledging to cut operational Scope 1 and 2 emissions by 2030 by 40% relative to 2016, up from 35%. The bank now aims to be carbon neutral in Canada by 2025 and globally by 2030. It also wants 100% of its electricity to be from emission-free sources by 2025 – in 2023 it was 83%.
It has also been continuing its work on ScotiaRise, the bank’s community investment initiative, ensuring it is creating real social outcomes rather than being simply a platform to talk about the money the bank is doling out.
ScotiaRise is a C$500 million 10-year effort that was launched in 2021. Canadian highlights from its third year included renewing its partnership with TalentLift Canada, a scheme that places refugees in work and new homes, as well as its programme to improve accessibility and inclusion for schoolchildren with disabilities.
Scotiabank calls itself Canada’s Hockey Bank, and its hockey-for-all scheme within ScotiaRise works to create a safe and inclusive culture in the sport. There are few things more Canadian than ice hockey; with Scotiabank’s help, it can showcase more than what happens on the rink.
