Four of Canada’s biggest banks have left the UN-backed Net-Zero Banking Alliance that aims to accelerate climate action among financial institutions.
Banks including BMO, National Bank, TD Bank Group and CIBC confirmed Friday they were no longer members.
The withdrawals from the alliance follow departures by the six largest banks in the U.S. in recent weeks, ahead of the presidential inauguration of Donald Trump.
Financial institutions are pulling back following sustained criticism from U.S. Republicans on various climate alliances and the very concept of factoring environmental risks into their business operations.
BlackRock, the world’s largest asset manager, left the Net Zero Asset Managers Initiative earlier this month in a move that led the group to suspend activities and launch a review of the initiative, citing “recent developments in the U.S.”
Canadian banks did not cite issues in the U.S. for why they were leaving the alliance, but in statements said they are able to continue with their climate work without the help of the group.
BMO spokesperson Jeff Roman said the bank is fully committed to its climate strategy and supporting its clients in the transition to net zero.
“We have robust internal capabilities to implement relevant international standards, supporting our climate strategy and meeting regulatory requirements,” he said.
Taking a pragmatic approach
National Bank said it left the alliance as it streamlines how it reports on its plans and progress. It said it would have a pragmatic approach and work with companies in all sectors to decarbonize.
TD said it has what it needs to advance its strategy and advise its clients as they adapt their businesses.
CIBC said the alliance was formed when the global industry was scaling up climate efforts but that the space has evolved enough for it to go it alone.
“Having made significant progress alongside our clients in these areas, we are now well-positioned to further this work outside of the formal structure of the NZBA,” said CIBC spokesperson Tom Wallis.
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Back in 2021, at the UN climate summit in Glasgow, more than 160 financial institutions signed on to the Glasgow Financial Alliance for Net Zero (GFANZ). The Net-Zero Banking Alliance is the industry-led banking element of GFANZ.
As the UN envoy on climate action and finance, tasked with finding capital to transition to a net-zero economy, Mark Carney — the former Bank of Canada governor and now a contender for Liberal leader — hailed GFANZ, telling the summit its members have made commitments that “will reshape their business models to fund the sustainable transformations of our economies.”
The withdrawal of banks from the alliance shows the need for government to step in, said Greenpeace senior energy strategist Keith Stewart.
“To call this a craven act of cowardice on climate would be too kind,” Stewart said in a statement.
“It does, however, demonstrate that if we want to avoid more communities being burned or flooded in climate-fuelled disasters by moving big money out of fossil fuels and into climate solutions, then we need governments to regulate banks the same way they do smokestacks and tailpipes.”
At a Jan. 7 conference, RBC chief executive Dave McKay said the alliance was in flux and questioned whether it was the right mechanism to reduce emissions.
The bank was still listed as a member as of early Saturday, as was Scotiabank and credit unions Vancity and Coast Capital.
