HomeCarbon NewsBanking on Carbon - BMO Acquires Carbon Offset Developer Radicle Group

Banking on Carbon – BMO Acquires Carbon Offset Developer Radicle Group

Bank of Montreal, BMO, is buying carbon offset developer Radicle Group to meet the bank clients’ demand for advice on emissions reduction.

BMO’s acquisition reflects major banks’ growing interest to help clients measure carbon emissions. It will also allow the bank to help their clients manage a difficult transition toward net zero emissions.

The buyout is also a move by BMO to be at the forefront of developing products fit for climate transition such as carbon offsets.

Dan Goldman from BMO said that:

“Climate, energy transition and net-zero targets come up in almost every client conversation we have… It’s not topical, it’s front and centre in terms of thinking about how the world evolves… Helping our clients navigate what is clearly going to be an enormous part of their agenda going forward was paramount.”

BMO – Radicle Acquisition Deal

Buying Radicle supports BMO’s Climate Ambition to be its clients’ lead partner in the transition to a net zero world.

Founded in 2008, Radicle has built a reputation as a leading developer of carbon offsets. It’s also the leading adviser that helps organizations measure and reduce emissions.

The firm is one of Canada’s most advanced carbon offset developers that generates carbon credits that entities can buy and sell to offset their unavoidable emissions.

Radicle has 130 employees and over 4,000 clients including Imperial Oil, Meg Energy, TC Energy, Chevron, and ConocoPhillips.

Carbon offsets, despite criticisms as less effective, are Radicle’s key area of expertise. But they will not be BMO’s main focus. The bank will continue to develop and adapt new products with Radicle’s expertise.

Buying carbon offsets means paying for projects that provide positive impact to the environment. Common examples are protecting trees or capturing and storing carbon.

Radicle also helps entities measure their emissions so they can develop ways to reduce them and track their progress.

The Radicle team will work with various bankers to advise clients on several areas. These include investment and corporate banking, commercial lending, and wealth management.

BMO is aware that building the carbon offset expertise from scratch will take time. So, the bank set its eyes on Radicle which was exploring a sale.

The role of carbon offset markets

Canada’s major banks are criticized for their continued funding of the oil and gas industry. Yet, the banks defended by saying they plan to work with heavy emitters to reduce emissions.

BMO isn’t the only Canadian lender to tap the carbon market for emission offsets.

For instance, the Canadian Imperial Bank of Commerce joined 3 other banks last year to launch a pilot marketplace for trading voluntary carbon credits on a digital ledger.

It was called Project Carbon whose first trade occurred in September between the Nature Conservancy of Canada and NatWest.

Carbon markets have a vital role in fighting the effects of climate change and thus, enable a sustainable future. They’ve grown remarkably around the world as people and companies work to scale the technologies needed to reach net zero.

To achieve their own net zero pledges, banks also have to boost ways to measure and reduce emissions by the firms they finance. And BMO knows this well that’s why it struck the deal.

It also expects Radicle to speed up its emissions reduction efforts, scale its activities across BMO’s client network, and develop more sustainability services.

To date, Radicle helped its clients generate over C$100M in value and cut carbon emissions by 7 million tonnes.

BMO did not reveal the financial terms of its Radicle deal but expects it to close by the end of 2022.

Most Popular
LATEST CARBON NEWS

Breakthrough in Low Cost Biofuels from Biomass

The U.S. Department of Energy Bioenergy Technologies Office (BETO) has achieved a major milestone in reducing the price of "drop-in" biofuels made from biomass. Drop-in...

Australia to Merge Compliance and Voluntary Carbon Markets?

Australia's climate policy advisory recently suggested the creation of a fully transparent national carbon market. This may open the doors to global carbon trade...

EKI Energy Shares Decline After India Bans Carbon Credit Export

The world’s largest carbon credit producer, EKI Energy, shares are down over 17% following India's decision to ban the export of carbon credits. India recently...

US Small Landowners Are Taking a Cut of the Carbon Markets

New opportunities in carbon markets are giving US small landowners alternatives to logging while mitigating climate change. According to the nonprofit American Forest Foundation, the largest...
CARBON INVESTOR EDUCATION

The Carbon Credit Lifecycle

Carbon credits, also called carbon offsets, have a crucial role in reaching net zero emissions goals. And while each carbon credit is not created...

Understanding The Carbon Cycle and How it Changes the Climate

Carbon is the foundation of all life on Earth. Humans are made of carbon. We eat carbon and almost everything is built on carbon. Carbon...

Climate Maps of Transformed United States (Under 5 Scenarios)

Rising temperatures are causing drastic effects on the planet’s living conditions while increasing sea levels continue to consume coastlines. Indeed, heat wave by heat wave,...

What Drives the Growth of The Carbon Offset Market? (3 Key Factors)

The demand for quality carbon offsets is at an all-time high due to the strong eagerness of businesses to act on climate change. This leads...