Royal Bank of Canada (RBC) has officially exited the United Nations-backed Net-Zero Banking Alliance, marking a significant shift in its climate strategy. The departure of RBC, which was confirmed on Friday, means that none of Canada's Big Six banks are currently part of the global initiative aimed at accelerating climate action among financial institutions. This decision follows a Bloomberg New Energy Finance ranking that placed RBC as having the worst ratio of clean energy to fossil fuel funding among major global banks.
RBC's exit comes amidst growing criticism from U.S. Republicans regarding the inclusion of environmental risks in business operations. The criticism has led numerous financial institutions to reconsider their involvement in climate alliances. RBC stated that it possesses the necessary tools and capabilities to implement its climate strategy independently and measure its performance effectively.
The withdrawal of RBC follows a broader trend among Canadian banks, which started distancing themselves from the alliance around the time of U.S. President Donald Trump's inauguration on January 20. This move aligns with similar actions taken by the six largest banks in the United States, who also left the alliance during this period. The shift is perceived as a reaction to the evolving political landscape in the U.S., which has influenced Canadian banks' decisions.
The Net-Zero Banking Alliance, initially designed to unite global banks in advancing climate goals, now faces a significant challenge with the absence of major North American banks. Despite this setback, the alliance continues to advocate for enhanced climate action and accountability within the financial sector.
RBC, Canada's largest bank, first had its departure reported by The Canadian Press on January 31, 2025. The timing of the exit closely followed the public release of RBC's unfavorable ranking by Bloomberg New Energy Finance. This ranking may have contributed to RBC's decision to part ways with the alliance, as it seeks to refine its approach to climate-related financial operations.
