Four of Canada's largest financial institutions—BMO, National Bank, TD Bank Group, and CIBC—have made a significant move by withdrawing from the United Nations-backed Net-Zero Banking Alliance (NZBA). The banks stated that they are capable of continuing their climate initiatives independently, without the alliance's support. National Bank specifically mentioned that its decision to exit was to streamline reporting on its climate plans and progress, while RBC's chief executive, Dave McKay, recently questioned the alliance's effectiveness in reducing emissions at a conference on January 7.
The financial sector has seen a wave of departures from climate alliances, with the Net Zero Asset Managers Initiative being suspended after BlackRock, the world's largest asset manager, left the group earlier this month. BlackRock's departure was attributed to "recent developments in the U.S." The trend comes on the heels of the six largest banks in the U.S. also exiting similar groups, largely due to ongoing criticism from U.S. Republicans regarding climate alliances and the incorporation of environmental risks into business operations.
The NZBA was established to accelerate climate action among financial institutions. Despite leaving the alliance, the Canadian banks have reiterated their commitment to climate strategies and supporting clients in their transition to net-zero emissions. CIBC noted that while the alliance was instrumental in scaling up global climate efforts initially, the industry has evolved sufficiently for them to continue independently. TD Bank Group echoed this sentiment, emphasizing that they possess the necessary tools to advance their strategy and guide their clients in adapting their businesses.
"We have robust internal capabilities to implement relevant international standards, supporting our climate strategy and meeting regulatory requirements." – Jeff Roman, BMO spokesman
"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." – Tom Wallis, CIBC spokesman
Greenpeace senior energy strategist Keith Stewart criticized the banks' withdrawal as a failure to address climate issues adequately.
"To call this a craven act of cowardice on climate would be too kind." – Keith Stewart, Greenpeace senior energy strategist
Stewart further emphasized the necessity for government regulation to ensure financial institutions contribute to addressing climate change effectively.
"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." – Keith Stewart, Greenpeace senior energy strategist
