Radicle entered an agreement to be acquired by Bank of Montreal. (Courtesy Radicle)

The Bank of Montreal (BMO) Financial Group plans to acquire Canada’s largest carbon credit developer, Radicle, in a move to support BMO’s sustainability and climate goals.

Calgary-based Radicle creates carbon offsets through carbon credit trading to reduce emissions and offers a software platform to quantify greenhouse gas emissions. It has presence in Canada and international markets through the U.S. and Brazil and access to compliance markets like the Canadian Federal OBPS, California and Quebec Cap-and-Trade, Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), and Alberta TIER.

It serves a diverse range of clients including Chevron, TC Energy, Nature’s Path and Vancity.

In an interview with SustainableBiz, then-CEO Ed Alfke said as of September 2021, Radicle worked with more than 3,000 clients, generated $100 million in value through carbon credits, traded over $370 million in environmental commodities and had facilitated the removal of six million tonnes of carbon dioxide from the atmosphere.

Today, Radicle claims to be the largest developer and supplier of compliance-grade offsets in Canada with over $500 million in environmental commodities across compliance and voluntary markets.

The acquisition requires regulatory approval but is expected to close by the end of 2022. The terms of the acquisition were not disclosed.

Saj Shapiro, CEO of Radicle, said in a press release, “By joining BMO, Radicle will be able to continue serving its existing customers, accelerate its emissions reduction efforts, scale its activities across BMO’s client network, develop additional sustainability services, and enter new markets.”

BMO’s climate ambitions

The acquisition comes as BMO took a public step into sustainability and furthering its net-zero goals in November 2021 with its Climate Ambition plan. The bank committed to: carbon neutrality, 100 per cent renewable energy and a 30 per cent emissions reduction goal by 2030; net-zero financed emissions in its lending by 2050; and green advisory for its clients.

It also established a Climate Institute, a data-driven centre to analyze climate-related risks faced by the financial sector. The venture utilizes an in-house climate analytics platform that applies geospatial data and scientific modelling.

“Radicle’s leading expertise and innovative solutions make BMO a leader in carbon credit development capabilities and the environmental commodity market,” said Dan Barclay, CEO of BMO Capital Markets, in the announcement. “These capabilities enhance our commitment to help our clients understand and manage the risks and opportunities of energy transition.”

The release states Radicle has 130 employees and over 4,000 clients worldwide. Upon closing, Radicle’s employees will become part of the BMO Capital Markets’ Global Markets group.