Four of Canada’s largest banks announced on Friday that they were withdrawing from a global climate coalition in the banking sector, joining six major U.S. banks.
The move follows Goldman Sachs’ decision to exit on December 6 and comes just before Donald Trump’s return to the White House next week. Trump has expressed opposition to climate-change policies set by governments.
The Canadian banks pulling out are TD Bank, Bank of Montreal, National Bank of Canada, and Canadian Imperial Bank of Commerce.
The U.S. banks that have also left the coalition include Wells Fargo, Citi, Bank of America, Morgan Stanley, and JPMorgan.
The Net-Zero Banking Alliance, launched in 2021 by former Bank of Canada Governor Mark Carney and supported by the UN, aimed to encourage financial institutions to reduce the impact of climate change and work toward achieving net-zero emissions.
In separate statements, the Canadian banks explained that they were now in a position to work independently and develop their climate strategies.
CIBC stated, “The NZBA was formed at a time when the global industry was scaling up efforts to take action on climate, and served a valuable role in galvanizing these efforts and establishing momentum.”
It added, “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 of the formal structure of the NZBA.”
Canadian banks have been under growing pressure to address climate-related risks tied to their funding activities in recent years. The country’s banking regulator has also introduced guidelines for managing climate-related risks.
Meanwhile, the U.S. Federal Reserve also announced its withdrawal from a global body of central banks and regulators focused on examining ways to manage climate risks in the financial system.
