Four major Canadian banks—BMO, National Bank, TD Bank Group, and CIBC—have officially withdrawn from the UN-led Net-Zero Banking Alliance (NZBA), a key climate-focused initiative. The announcement was made on Friday, January 19, marking a significant shift in the financial sector’s approach to climate response.
This move follows the recent departure of six major U.S. banks from the same alliance and is part of a broader trend in which the financial sector is retreating from climate action policies. The political climate in the U.S., particularly criticism from the Republican Party regarding financial institutions’ climate strategies, is believed to be influencing these decisions. Notably, BlackRock, the world’s largest asset management company, also pulled out of the Net Zero Asset Managers Initiative earlier this month, citing internal reviews.
While the Canadian banks did not explicitly point to U.S. political pressure as the reason for their withdrawals, they stated that they believe they can independently pursue climate strategies without the alliance. BMO’s spokesman, Jeff Roman, emphasized, “We are fully capable of applying international standards on our own.” National Bank cited the desire for simplified reporting, TD emphasized its commitment to customer support, and CIBC noted that the conditions for independent operations have now been established as the industry grows.
The move has drawn criticism from environmental groups. Keith Stewart, an energy strategist at Greenpeace, called the banks’ exit “a cowardly retreat from responding to the climate problem,” and argued that governments should impose stronger regulations on financial institutions to ensure continued progress on climate issues.
As of now, RBC, Scotiabank, Vancity, and Coast Capital remain members of the Net-Zero Banking Alliance, and RBC’s CEO, Dave Mackay, has expressed scepticism about the effectiveness of such banking alliances in reducing emissions. Meanwhile, U.S. banking giant JPMorgan also announced its withdrawal from the Carbon Zero Bank Alliance earlier this month, further signalling a retreat from collective climate action within the banking sector.