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Canadian Imperial Bank of Commerce has removed a contentious restriction that would have prevented loans to energy companies from being included in its new bond offering aimed at bolstering female leadership.

When CIBC announced last month its Women in Leadership Bond, which funds companies striving to improve gender diversity in their executive ranks, the bank listed a number of criteria related to the presence of women in the company’s upper ranks. But it also specified that loans to companies in the fossil-fuels industry or involved in the construction of new large-scale hydro projects would not be included in the offering.

Susan Rimmer, CIBC’s head of global corporate banking, said at the time that the bank was simply following the recommendations of Sustainalytics. The research firm – which specializes in environmental, social and corporate governance, or “ESG,” issues – had made the suggestion so that companies that have one bucket for all of their ESG investments would be able to purchase the bond, Ms. Rimmer had said.

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But when the criteria was published it created an uproar among energy producers in Western Canada, according to a person familiar with the matter.

Canadian oil sands producers have found themselves shut out by a number of European banks that have recently backed away from financing new fossil-fuel projects. Europe’s largest bank, HSBC, announced in April that it would mostly stop funding new oil sands projects, coal power plants and Arctic drilling, following similar announcements from Amsterdam-based ING Group and Paris-based BNP Paribas last year.

CIBC says it revised the bond offering as soon as it realized that the fossil-fuel exemption didn’t fit with its overall lending practices. The bank says it is an active lender in the energy sector, and chief executive Victor Dodig espoused the importance of getting Canadian oil to global markets in a recent speech.

“I’m the first one to advocate for a greener Canada, a more environmentally responsible Canada, but I also look at the fact that 100 million barrels of oil is being consumed a day around the world, and it’s not dropping just yet,” Mr. Dodig said during his address to the Empire Club in Toronto last month.

Over all, CIBC says the bond was met with strong demand. The order book was more than 2.5 times oversubscribed from 79 investors.

Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers (CAPP), says the association provided CIBC with some feedback about the industry’s suitability for inclusion in the bond offering.

“We support gender diversity across Corporate Canada and continue to work on providing an inclusive environment for our future business success," Mr. McMillan said in an e-mail.

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“The bonds will help meet a growing demand among institutional investors for socially responsible investments. The Canadian oil and natural gas industry, responsibly producing resources with some of the highest environmental and safety standards, is a socially responsible source of investment in Canada.”

CAPP has been vocal in its criticism of HSBC, saying earlier this year that the London-based bank has forsaken Canada’s energy industry – with its stringent regulations and corporate efforts to improve environmental performance – in favour of jurisdictions such as Russia where standards are much lower.

In order to qualify, the company receiving the loan must have either 30 per cent of its executive ranks or board seats occupied by women, or must have signed on to the Catalyst Accord 2022. The accord calls on companies to boost the number of women on their boards and in executive positions to 30 per cent by 2022.

Loan recipients must also have at least one woman on the board and one in an executive position. Companies whose primary business is alcohol, tobacco, gambling, military contracting, predatory lending, palm oil and adult entertainment will be excluded.

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