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Case study

Case study: Canadian Imperial Bank of Commerce

EOS Insight
24 January 2025 |

How we engaged with a North American financial services provider.

Background

In June 2008, the Truth and Reconciliation Commission of Canada (TRC) was established to document the history and lasting impacts of The Indian Residential Schools (IRS) system.  The IRS is a source of intergenerational trauma in Indigenous communities. Throughout the approximately 150 years that these schools operated in Canada, they created and left behind a legacy of recognised social inequities and systemic discrimination that continue to be pervasive throughout Canada.1

In 2015, the TRC published 94 “calls to action” that urged all levels of government to work together to change policies and programmes in a concerted effort to repair the harm caused by residential schools and move forward with reconciliation. One of the calls to action, #92, calls on the corporate sector in Canada to use the United Nations Declaration on the Rights of Indigenous Peoples as a reconciliation framework and to apply its standards to corporate policy and core operational activities involving Indigenous peoples and their lands and resources.2

In 2021, CIBC formally launched an Indigenous Reconciliation Action Committee to build a framework with clear and measurable commitments that will accelerate progress while responding to the Truth and Reconciliation Commission of Canada’s Call to Action #92.3

We noted the progress made by the company to reach gender parity at the board level and its voluntary disclosure of diversity metrics beyond race and gender.

Our engagement

We have been engaging with CIBC on topics related to Indigenous Peoples since 2022, including its involvement with financing the controversial Line 3 oil & gas pipeline, encouraging the company to implement a financing requirement for free, prior, and informed consent (FPIC), and Indigenous representation.

In a meeting with the board chair in 2022, we noted the progress made by the company to reach gender parity at the board level and its voluntary disclosure of diversity metrics beyond race and gender. As a step further, we encouraged the bank to focus on Indigenous representation at the board level to demonstrate and guide its stated commitments to Indigenous Peoples.

We met in person with a senior director of investor relations and attended the company’s virtual ESG investor day in 2022, where we reiterated our request for Indigenous representation to the board members present. The company highlighted its targets to increase Indigenous presence in management and said board diversity is a key consideration for refreshment. During an on-site visit to the bank’s new headquarters in 2023, the senior director of investor relations guided us through the bank’s Legacy Space, a convening room created in response to the TRC’s Call to Action #92 and the bank’s pledge for “clear and measurable actions to promote reconciliation”.4 The Legacy Space was designed with the help of local First Nations leaders and Indigenous team members.

Key learnings for the business included the importance of speaking directly to Indigenous peoples and communities to consider their voices and needs.

Changes at the company

In November 2023 the company appointed Mark Podlasly to the board. He is a member of the Cook’s Ferry Indian Band, Nlaka’pamux Nation in British Columbia and chief sustainability officer at the First Nations Major Projects Coalition and brings experience in energy infrastructure and First Nations economic development. In a call with the investor relations team in March 2024, we requested a meeting with Mr. Podlasly to learn more about his contributions in the board room and views on the bank’s reconciliation strategy.

In October 2024, Mr. Podlasly met with EOS and some of its clients in the Legacy Room to discuss the importance of board engagement on the bank’s reconciliation strategy and lessons for other companies that are on their own reconciliation journeys. Key learnings for the business included the importance of speaking directly to Indigenous peoples and communities to consider their voices and needs, the business opportunity presented by inclusion, and the impact of Mr. Podlasly’s own diverse experience to board room decision-making which includes the Seven Generations Principle, a guiding philosophy originating from various Indigenous cultures, which emphasizes considering the impact of decisions made today on the next seven generations.

Potential outcomes and next steps

The appointment of Mark Podlasly should help contribute toward the board composition of the company better reflecting the diversity of the bank’s stakeholders, including its customers and employees. Over time, we believe this can contribute to improved board effectiveness, including how the board considers it can seize opportunities to grow its services to indigenous peoples, who it is estimated comprise around 5% of the Canadian population. We plan to continue to monitor the company’s board effectiveness.5

Check

This case study has been shared with CIBC to enable it to provide input to help ensure it provides a fair representation of EOS at Federated Hermes Limited’s (EOS) engagement and resulting changes made at the company.

Case studies are shown to demonstrate engagement; EOS does not make any investment recommendations and the information is not an offer to buy or sell securities.

1The History and Impact of Residential Schools | PBS
2 Business and reconciliation (rcaanc-cirnac.gc.ca)
3 CIBC recognizes National Indigenous Peoples Day with increased commitments toward reconciliation - Jun 21, 2021 (mediaroom.com)
4 "Breath-taking new Toronto office tower opens space dedicated to indigenous history" (Blogto.com)
5 Potential outcomes stated above are not intended to be a forecast of future performance, which will depend on a range of factors which cannot be guaranteed. These may include factors such as wider business performance in the context of dependencies such as developments in public policy, technology and market demand. Any quantified potential outcomes are based on the company’s disclosed targets and other assumptions as referenced in this document.

Engagement objectives

Sustainable Development Goal

9736

Top success

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