Top Canadian banks join exodus from climate coalition

Toronto — Four of Canada’s biggest lenders plan to withdraw from a global banking sector climate coalition, joining six major US banks.

The departures from the Net-Zero Banking Alliance follow Goldman Sachs’ announcement on December 6 that it was leaving, and come ahead of US president-elect Donald Trump’s return to the White House this week.

Trump has been critical of efforts by governments to prescribe climate-change policies.

The four Canadian banks are TD Bank, Bank of Montreal, National Bank of Canada and Canadian Imperial Bank of Commerce (CIBC).

The big US banks that have withdrawn are Goldman, Wells Fargo, Citibank, Bank of America, Morgan Stanley and JPMorgan.

The Net-Zero Banking Alliance, a UN-sponsored initiative set up by former Bank of Canada governor Mark Carney, was launched in 2021 to encourage financial institutions to limit the effects of climate change and push towards achieving net-zero emissions.

The Canadian banks said in separate statements they were equipped to work outside the alliance and develop their climate strategies.

“The Net-Zero Banking Alliance was formed at a time when the global industry was scaling up efforts to take action on climate, and served a valuable role in galvanising these efforts and establishing momentum,” CIBC said in a statement.

“As this space has evolved and matured, and having made significant progress alongside our clients in these areas, we are now well positioned to further this work outside the formal structure of the alliance,” it said.

Canadian banks have faced mounting pressure to address climate-related risks arising from their funding activities in the past few years. The country’s banking regulator has also introduced guidelines for financial institutions to manage their climate-related risks.

Separately, the US Federal Reserve announced it had withdrawn from a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system.

Reuters