Bank of Montreal

Board-level oversight of sustainability is embedded in the charter of the Audit and Conduct Review Committee. BMO's directors are recruited and evaluated based on a skills matrix that includes understanding and experience with corporate responsibility and sustainable development practices. Nine of our 12 current independent directors have this experience. You'll find more information about the skills and experience of our directors in our 2022 Management Proxy Circular. The Chair of the Audit and Conduct Review Committee has a strong background in climate change and sustainability and led Ernst & Young's global Climate Change and Sustainable Services practice. Board members receive ongoing training on sustainability topics, including climate risk and disclosure, and the training is available to all directors, including members of subsidiary boards. In 2021, the full Board of Directors received two presentations on BMO's climate strategy. [...] Audit and Conduct Review Committee Assesses the effectiveness of BMO's governance of sustainability issues, including climate change. Approves BMO's Sustainability Report and Public Accountability Statement prior to disclosure, including the Climate Report. Risk Review Committee Assists the Board in fulfilling its risk management oversight responsibilities. This involves overseeing the identification, assessment and management of BMO's environmental and social risks, including our risk culture, adherence by operating groups to risk management corporate policies and procedures, and compliance with risk-related regulatory requirements. Reviews our risk management framework and provides guidance for the governance of our risk-taking activities. Reviews revisions to the Risk Appetite Framework, including the addition of a qualitative statement and key risk metric (KRM) referencing climate change in 2020 and the updates to both in 2021. Meets seven times annually and more frequently as important matters arise. BMO's General Counsel and Chief Sustainability Officer met with the Audit and Conduct Review Committee to discuss climate-related issues three times in 2021. Meets nine times annually. BMO's Chief Sustainability Officer and Head of Risk Frameworks & Regulatory Capital Oversight met with the Risk Review Committee to discuss climate-related risk issues once in 2021. Reviews and approves sustainability disclosures, including the Climate Report. Metrics include sustainable finance tracking, carbon-related assets, operational and financed emissions and targets. Reviews the risk appetite statement for environmental and social risk annually, reviews key risk metrics on lending to carbon-related assets as a percentage of total loans and acceptances, net of allowance for credit losses on impaired loans quarterly, and receives ad hoc presentations on environmental and social risk and climate change.

At the Board of Directors level, each Board committee has responsibility for sustainability and climate change risks that fall within its existing purview. For instance, the Audit and Conduct Review Committee (ACRC) assesses the effectiveness of our governance of sustainability issues and reviews and approves our Sustainability Report and Public Accountability Statement and Climate Report. Further details on Board oversight of climate change-related topics and frequency of meetings can be found in our 2022 Climate Report. BMO's General Counsel is the Executive Committee sponsor for sustainability and reports directly to the CEO. Reporting to the General Counsel is BMO's Chief Sustainability Officer who manages the sustainability team and BMO Climate Institute, and oversees our sustainability strategy and leads bank- wide initiatives on environmental and social risk, climate change strategy, operational sustainability and the bank's own approach to sustainable finance with Treasury and our Sustainable Finance team. The ESG Executive Committee, BMO Sustainability Council and other management committees, forums and working groups – support sustainability and climate governance across the bank, as discussed in our 2022 Sustainability Report and our 2022 Climate Report. The ESG Executive Committee meets quarterly and oversees ESG matters including sustainability and climate change topics, including the Climate Ambition and financed emissions targets. The BMO Sustainability Council is comprised of senior leaders from the lines of business and corporate services across the organization, who meet quarterly and review the PRB Reporting and Self-Assessment Template annually. BMO's CRA Oversight Committee meets quarterly to discuss key strategic, operational and governance matters related to the performance of BMO Harris Bank on CRA-related metrics, such as BMO EMpower. Finally, the Sustainable Finance team is responsible for BMO's affordable housing commitment in Canada. Sustainability is integrated into our executive compensation design. 25% of executive variable pay funding is tied to the achievement of our Purpose and strategic objectives, which are non-financial goals. Each year we include ESG in our Purpose and strategic objectives, as well as in the individual goals for our executives, to capture opportunities and manage risks in areas such as sustainable finance, climate change, and diversity, equity and inclusion.

At the Board of Directors level, each Board committee has responsibility for sustainability/ climate change risks that fall within its existing purview: • The Audit and Conduct Review Committee (ACRC) assesses the effectiveness of our governance of sustainability issues and reviews and approves our Sustainability Report and Public Accountability Statement and Climate Report. • The Risk Review Committee (RRC) oversees the identification, assessment, and management of the bank's environmental and social risks, including risks related to climate change. • The Human Resources Committee is responsible for aligning executive compensation with performance, including performance on environmental and social objectives. • The Governance and Nominating Committee oversees the alignment of ESG-related reporting to the Board and its committees. The CEO has appointed BMO's General Counsel as Executive Committee sponsor for sustainability. Reporting to the General Counsel, BMO's Chief Sustainability Officer oversees sustainability strategy, leading bank-wide initiatives on environmental and social risk working with the Chief Risk Officer, climate change strategy, ESG-focused investor relations, sustainability-related disclosure, operational sustainability, and the bank's approach to sustainable finance with Treasury and our Sustainable Finance team. [...] Management committees, forums and working groups – the ESG Executive Forum, BMO Sustainability Council and others – support sustainable governance across the bank, as discussed in our 2021 Sustainability Report and our 2021 Climate Report. In our U.S. operations, the CRA Oversight Committee (see Principle 2.3) is comprised of the CEO and the Chief CRA Officer of BMO Harris Bank, representatives from Compliance and Audit, and heads of the lines of business responsible for objectives related to CRA, including BMO EMpower.

BMO's Code of Conduct governs our political participation and requires us to comply with legal, regulatory, and internal guidelines for political participation, including guidelines about using corporate funds to support political candidates, campaigns, committees, or other political groups. The code makes clear that certain employees may be subject to additional limitations on personal political contributions. Specifically, in the United States, using company resources (e.g. email, letterhead, phones, facilities) for a political purpose is prohibited and may violate campaign finance laws.

BMO's policies and procedures govern our interactions with public officials, including those relating to gifts and entertainment, political contributions, bribery, and required public disclosures. [...] BMO Financial Corp. (BFC, our U.S. bank holding company) sponsors two PACs—these are registered with the U.S. Federal Election Commission: (1) BMO Financial Corp. Good Governance Fund: Federal; and (2) BMO Financial Corp. Good Governance Fund: General. These PACs are funded by voluntary contributions from eligible employees; both PAC activities are overseen by a board of directors. BFC PACs are bipartisan—their contributions support candidates or political committees that align to BFC priorities not the political preferences or priorities of senior management. [...] As required by law, PAC contributions are reported to the Federal Election Commission and applicable state or local election commissions—these are publicly available at https://www.fec.gov. Contributions are also disclosed in our Environmental, Social & Governance (ESG) Report.

BMO is registered for its lobbying activities in Canadian jurisdictions where we are required by law—currently, the Federal and City of Toronto governments. Reporting on our lobbying activities is governed by our internal policies and procedures, as well as federal, state and local laws.

BMO participates in public policy discussions on issues that affect our business and are important to our shareholders, customers, and employees. Our Government Relations team manages lobbying activity and tracks our engagement with public officials relating to public policy.

We communicate with public officials openly and transparently. We follow the letter and spirit of the law, consistent with our Code of Conduct and Anti-Corruption policy and procedures.

BMO's Government Relations team manages BMO's lobbyist registrations and tracks lobbying communications between BMO employees and government officials for reporting purposes.

Each year, all employees complete mandatory Code of Conduct training which covers Anti-Bribery and Corruption principles, including managing conflicts of interest. The training reviews the importance of identifying potential conflicts of interest, including outside activities that involve political participation.

In Canada, monthly federal lobbying reports are filed with the Office of the Commissioner of Lobbying of Canada (OCL). A list of our reportable communications can be found on the OCL website. In the U.S., we file federal lobbying disclosure reports as required by law. These reports include quarterly expenditures on lobbying activities, the issues we lobby about and the names of individuals registered to lobby on BMO's behalf. These disclosures can be found at https://lda.senate.gov/system/public/.

Our Management Proxy Circular provides information about our board and corporate governance practices. We have integrated our sustainability strategies into our corporate governance framework. Responsibility for the oversight of sustainability is included in the mandate of our Board of Directors, and each standing committee has responsibility for the oversight of sustainability that falls within its purview (see page 8). BMO's General Counsel is the Executive Committee Sponsor for Sustainability. The General Counsel reports to the Chief Executive Officer (CEO) and is accountable for BMO's exposure to legal and regulatory risk and reputation risk, as well as our business conduct and ethics, procurement and sustainability, including climate change. The Environmental, Social and Governance Executive Committee, composed of Executive Committee members and chaired by the General Counsel, provides oversight of our sustainability strategy and Climate Ambition, advancement of commercial strategy goals, enhancement of capabilities and internal and external engagement on the topic of climate. This committee provides enterprise coordination that links our climate expertise, risk evaluations and commercialization strategy, enabling our agile and market-responsive approach to risks and opportunities. BMO's Chief Sustainability Officer serves as the Secretary of this committee. The Chief Sustainability Officer reports to the General Counsel and leads the BMO Sustainability Office, which includes the BMO Climate Institute and the Accessibility Office. The Sustainability Office supports the General Counsel's mandate and leads, in collaboration with partners across the bank, the development of strategies related to sustainability (including climate commercialization and our Transition Action Plan), enterprise-wide initiatives on environmental and social risks, sustainability-related disclosures and operational decarbonization strategy. The Sustainability Office also supports Finance with investor relations activities that focus on sustainability, and supports Treasury and our Operating Groups in their approach to sustainable finance.

BMO Global Asset Management regularly uses our voice as an institutional investor through policy advocacy. This includes advocating on developments related to climate and net zero. In 2022, this included submitting comment letters on climate-related disclosures proposed by the SEC, CSA & ISSB. Please refer to BMO Global Asset Management Responsible Investment 2022 Annual Report for more details pg 25): https://www.bmogam.com/uploads/2023/04/ce7b218230fc313e17f932dc0e23052e/bmo-responsible-investing-annual-report-2022-en.pdf [...] Please also refer to our Stewardship Policy to learn more about our approach to engagement on ESG topics (https://www.bmogam.com/ca-en/institutional/responsible­investment/responsible-investing-policies-approaches/) [...] Refer to the BMO Global Asset Management Responsible Investment 2022 Annual Report for details on our engagement with investees on a broad range of ESG issues including climate, forests, and water (pages 18-21, 68-71): https://www.bmogam.com/uploads/2023/04/ce7b218230fc313e17f932dc0e23052e/bmo-responsible-investing-annual-report-2022-en.pdf [...] Please also refer to our Stewardship Policy to learn more about our approach to engagement on ESG topics (https://www.bmogam.com/ca-en/institutional/responsible­investment/responsible-investing-policies-approaches/)

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Only authorized BMO representatives knowledgeable of climate strategy are involved in climate related engagement with stakeholders or policy makers. BMO's Sustainability Council, comprised of a cross section of leadership are kept apprised of climate strategy matters through quarterly Sustainability Council meetings, including any engagement opportunities. BMO's ESG Executive Forum, comprised of members of the Executive Committee are kept apprised of the same through regularly scheduled meetings.