Four Major Canadian Banks Exit Mark Carney-Led Climate Alliance, Citing Independence in Climate Goals
Canada’s top financial institutions opt out of UN-backed climate initiative, signaling a shift in strategy toward achieving net-zero goals.
In a significant move shaking the landscape of climate finance, four of Canada’s largest banks—BMO, National Bank, TD Bank Group, and CIBC—have officially withdrawn from the United Nations-backed Net-Zero Banking Alliance (NZBA). The initiative, a key part of the Glasgow Financial Alliance for Net Zero (GFANZ), was created to mobilize financial institutions worldwide in the fight against climate change.
This exodus mirrors similar decisions made by the six largest U.S. banks in recent weeks, reflecting growing tensions over the role of financial institutions in climate-related commitments.
Why Are Banks Pulling Out?
The withdrawals come amid increased scrutiny and criticism from political figures, particularly U.S. Republicans, over the integration of environmental considerations into financial decision-making. This resistance to “woke capitalism” has driven financial giants like BlackRock, the world’s largest asset manager, to step back from climate-focused initiatives. Earlier this month, BlackRock exited the Net Zero Asset Managers Initiative, prompting a suspension and review of the group’s activities.
While Canadian banks have not cited U.S. political dynamics as a reason for their departure, their statements suggest a belief that they can achieve climate goals independently.
BMO spokesperson Jeff Roman affirmed the bank’s commitment to its climate strategy, emphasizing robust internal frameworks for implementing global standards.
National Bank described its decision as part of streamlining climate-related reporting and pledged to adopt a pragmatic, inclusive approach to decarbonization across sectors.
TD Bank Group reiterated its ability to advance its climate strategy and advise clients without NZBA’s involvement.
CIBC spokesperson Tom Wallis noted that the industry has matured since the alliance’s inception in 2021, enabling the bank to pursue climate goals outside the NZBA framework.
Criticism and Concerns Over Climate Commitments
Environmental advocacy groups have expressed alarm over these developments, calling for stronger regulatory oversight of financial institutions’ climate commitments. Keith Stewart, Greenpeace’s senior energy strategist, labeled the banks’ exit as a “craven act of cowardice” and warned of the potential consequences for climate action.
“If we want to move big money out of fossil fuels and into climate solutions, governments need to regulate banks the same way they do smokestacks and tailpipes,” said Stewart.
The Future of GFANZ and the Role of Government
Launched during the 2021 UN Climate Change Conference (COP26) in Glasgow, GFANZ brought together more than 160 financial institutions with the goal of aligning capital flows with net-zero emissions by 2050. The Net-Zero Banking Alliance, spearheaded by Mark Carney, was a cornerstone of this effort.
Carney, the former Governor of the Bank of Canada and a potential contender for the Liberal Party leadership, previously lauded the initiative as a transformative force for sustainable economic transitions. However, the alliance’s credibility has been shaken by high-profile withdrawals and growing skepticism within the financial sector.
At a recent conference, Dave McKay, CEO of RBC—Canada’s largest bank—questioned the effectiveness of NZBA as a mechanism for reducing emissions. RBC, along with Scotiabank and credit unions Vancity and Coast Capital, remains listed as a member, at least for now.
Implications for Climate Action
The departure of major financial institutions from global climate initiatives underscores the challenges of voluntary, industry-led approaches to addressing climate change. Critics argue that without stronger government intervention, these initiatives may fall short of driving meaningful progress.
As climate disasters such as wildfires and floods intensify, the financial sector’s role in mitigating environmental risks and funding sustainable solutions remains a pressing concern.
Source : The Canadian Press
