Canadian and U.S. Banks Exit Climate Alliance Amid Policy Shifts

Four major Canadian banks and six U.S. banking giants have withdrawn from the Net-Zero Banking Alliance (NZBA), a UN initiative aimed at driving net-zero emissions. The departures began with Goldman Sachs’ announcement on December 6 and align with Donald Trump's impending return to the White House, where he has been critical of climate-change mandates.

Canada’s TD Bank, Bank of Montreal, National Bank of Canada, and CIBC joined the U.S. banks—Wells Fargo, Citi, Bank of America, Morgan Stanley, and JPMorgan—in exiting the alliance. The NZBA, established in 2021 by former Bank of Canada Governor Mark Carney, sought to encourage financial institutions to combat climate change.

In their statements, Canadian banks emphasized their capability to pursue independent climate strategies. CIBC noted the alliance had played a critical role in initiating global climate efforts but stated that its evolved approach no longer required NZBA membership. The banks highlighted significant progress made with clients in addressing climate-related challenges.

The exits occur amidst growing pressure on Canadian banks to address climate risks tied to their funding activities. The country’s banking regulator recently issued guidelines to manage these risks. Meanwhile, the U.S. Federal Reserve announced its withdrawal from a global regulatory body addressing climate-related financial risks, signaling a broader shift in priorities among financial institutions.

This wave of exits underscores a changing approach to climate commitments, with banks opting for tailored strategies over collective frameworks, reflecting the evolving landscape of global climate policies.