Top Canadian banks quit global climate coalition ahead of Trump inauguration
TORONTO – Four of Canada’s biggest lenders said on Friday they were withdrawing from a global banking sector climate coalition, joining six major U.S. banks, in a move aligned with Trump’s stance on climate action, according to Reuters.
The departures from the Net-Zero Banking Alliance began with Goldman Sachs’ GS.N announcement on Dec. 6 and come ahead of Donald Trump’s return to the White House next week. Trump has been critical of efforts by governments to prescribe climate-change policies.
The four Canadian banks are TD Bank TD.TO, Bank of Montreal BMO.TO, National Bank of Canada NA.TO and Canadian Imperial Bank of Commerce CM.TO (CIBC).
The other big U.S. banks that have withdrawn are Wells Fargo WFC.N, Citi C.N, Bank of America BAC.N, Morgan Stanley MS.N and JPMorgan JPM.N.
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 toward achieving net-zero emissions.
The Canadian banks said in separate statements that they were equipped to work outside the alliance and develop their climate strategies.
“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,” 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 of the formal structure of the NZBA,” 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Separately, the U.S. Federal Reserve announced it had withdrawn from a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system.
According to the New York Times, the Fed’s decision to leave the network was met with dismay from experts on the relationship between climate change and the financial system.
Lisa Sachs, director of Columbia University’s Center on Sustainable Investment, noted that membership did not compel the Fed to take actions outside its statutory mandate.
“The Fed’s withdrawal reflects a growing trend of U.S. retreat from positions of leadership and cooperation in multilateral fora, sidelining the U.S. and ceding leadership to other nations that will take up the mantle,” Ms. Sachs wrote in an email.
“Withdrawing Fed participation from the climate conversation among the world’s central bankers further undermines our country’s prospects for assessing and managing climate risk without having our ideological blinders on,” Sarah Bloom Raskin, a former Fed governor, wrote in an email, adding that “The symbolism of this move at the beginning of 2025 is ominous.”
