© 2010 Torys LLP. All rights reserved.

Voluntary Trading & CSR —A Canadian Example

Carbon TradeEx AmericaSeptember 28, 2010

Patricia A. KovalPartner, Torys LLPCo-Chair, Climate Change & Emissions Trading Grouppkoval@torys.com

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Greening Canada Fund

• A limited partnership open to Canadian investors, created by a community non-profit organization

• Styled along ‘non-profit’ lines

• Can deliver credits directly to its investors

• Fit for: carbon neutrality and CSR

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Three-pronged value

Value for Company X

Enables opportunities for reputational improvement through public recognition of community projects

Addresses customer expectations of responsible corporate actions

Benefits society by caring for the environment

Press releases show support for the community and customers

Environment

Community Business

Improve the environment by reducing carbon

emissions

Invest in Canadian green technology sector

Include projects in the public and non-profit sectors, e.g. schools, hospitals

Focus of GGF

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Greening Canada Fund — delivering Corporate Responsibility goals

GCF ties together business goals with citizenship and environmental goals

Effective Corporate Responsibility programs target strategic projects

Greening Canada Fund is committed to working with partners to ensure investments are tailored to their specific corporate objectives

– We believe that a strong citizenship is targeted and embarks on initiatives consistent with corporate objectives

GCF selects specific projects that align with existing areas of focus, such as:

– Source carbon offsets from community projects like schools, hospitals and social housing

– Offsets from private projects can be tailored to meet corporate objectives

GCF is developing the “green economy”

Forward thinking companies view sustainability as caring about the world’s future – and the future of their business

Companies are reducing their carbon footprint and addressing their environmental goals by supporting community projects

High quality credits provide positive public relations and positive connection to all stakeholders

“Frame the issue in the context of higher-level values such as responsibility, stewardship, vision, ingenuity.”

Simen Retallack,openDemocracy

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Greening Canada Fund: Benefits vs. Alternatives

Partnering with GCF Managing Offsets Internally

VS.

GCF delivers high quality carbon offsets

– Rigorous governance framework ensures credits meet environmental integrity criteria

– Economies of scale achieved by greater capital pool

– Larger selection of projects

Alternative options for obtaining carbon credits consumes more resources and is riskier

– Investing directly in specific projects requires internal expertise and allocating human resources

– Detracts from key corporate focus

– Broker network doesn’t ensure high quality offsets

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Investor Comments

“What makes the Greening Canada Fund so attractive is that the beneficiaries are located in communities across the country. Bringing local green projects to life will show Canadians how we can make a measurable difference in reducing emissions in our neighbourhoods – it makes the carbon story real.”

Karen Clarke-WhistlerChief Environment Officer

“BMO is proud to be one of the initial investors in the Greening Canada Fund. Our customers expect us to lead by example. Investing in this unique fund complements the efforts we are already making to achieve absolute reductions in our carbon emissions and use renewable energy – helping us achieve our commitment to reach carbon neutrality next year.”

Cam FowlerHead of Strategy and Corporate Marketing

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Project Examples

Type Sources GCF Examples Applications

Social(Public/non-profit)

• School boards• Public housing• Hospitals

• Toronto District School Board• Montreal School Board• B.C. landfill gas management project

• Retrofits• Solar heating• Geo thermal• Biomass power• Energy efficiency

Private • Power• Manufacturing• Waste management

• Quebec biomass project• Nova Scotia pulp & paper efficiency• B.C. biomass

• Wind power• Landfill gas flaring• Biomass power

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