Four of Canada’s biggest banks are leaving the industry’s top climate-finance alliance, joining Wall Street peers and extending an exodus that started in early December.
Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Bank of Montreal and National Bank of Canada said Friday that they’re no longer members of the Net-Zero Banking Alliance. All four added that they’re still committed to meeting climate-related targets.
The departures raise further questions about NZBA’s future. Defections from the group began last month when Goldman Sachs Group Inc. left. The firm’s exit was followed by Morgan Stanley, Wells Fargo & Co., Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co.
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The moves coincide with intensifying Republican attacks on what US conservatives call “woke” capitalism and criticisms that such voluntary alliances haven’t had a meaningful impact on reducing greenhouse gas emissions. Now, the defections are stretching to Canada.
Banks that sign up to NZBA commit to transition their financed emissions to align with “pathways to net zero by 2050” at the latest, according to the group’s website. They’re also required to provide 2030 targets to show they’re on track, and to document their progress.
NZBA sent a message to members earlier this week, saying it was focusing on its “next phase” to continue to help banks manage their climate-related risks and opportunities. The alliance, which was convened by the United Nations Environment Programme Finance Initiative almost four years ago, still has more than 135 members from over 40 countries, according to its website.
BMO Chief Executive Officer Darryl White said at an industry conference last week that the bank supports the transition to a low-carbon economy regardless of the “mechanism.” He added that the company also has “a commitment, particularly here in Canada, to our legacy energy customers completely. We won’t abandon that.”
In announcing its decision to leave NZBA, BMO said Friday that it has “robust internal capabilities to implement relevant international standards, supporting our climate strategy and meeting regulatory requirements.”
Toronto-Dominion said in its statement that it has “the resources, relationships and capabilities to continue to advance our strategy, deliver for our shareholders, and advise our clients as they adapt their businesses and seize new opportunities.”
Montreal-based National Bank, Canada’s sixth-largest lender, said it has decided to “streamline how we report on our plans and our progress.”
CIBC said the company recognizes “the scale and urgency of climate change and our stated goals and commitments remain the same”
Canadian banks were some of the biggest providers of finance to oil, gas and coal in 2024, with Toronto-Dominion, Royal Bank of Canada, BMO and CIBC ranking among the top 10 for such deals, according to data compiled by Bloomberg. The biggest provider of fossil-fuel finance last year was JPMorgan.
Other climate alliances also have lost high-profile members. Just over a week into the new year, BlackRock Inc. said it was ending its membership in the Net Zero Asset Managers initiative. The firm, which was among a group of asset managers singled out in a lawsuit led by Texas alleging antitrust breaches due to the adoption of pro-climate strategies that suppress coal production, said staying inside NZBA had and exposed it to “legal inquiries.”
In 2023, a net zero group for insurers saw a mass walkout amid GOP litigation threats. A similar group for investors, Climate Action 100+, was hit by high-profile defections last year as the asset management arms of Goldman and JPMorgan, as well as Pacific Investment Management Co. all left.
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