By Nivedita Balu
TORONTO (Reuters) -TD Bank, Bank of Montreal and National Bank of Canada said on Friday they were withdrawing from the Net-Zero Banking Alliance (NZBA), joining the big six US banks in quitting the banking sector climate coalition.
The Canadian banks’ action follows that of U.S. lenders that have been rushing in the past two months to quit the climate coalition amid rising U.S. political pressure.
Goldman Sachs broke ranks to announce on Dec. 6 it was leaving NZBA and was soon followed by Wells Fargo, Citi, Bank of America, Morgan Stanley and JPMorgan.
The NZBA, 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.
Canada’s second largest bank TD, said it had the resources to advance its climate strategy and advise clients as they adapt their businesses.
“We are fully committed to our climate strategy and supporting our clients as their lead partner in the transition to a net zero world,” BMO said in a statement.
The lender, Canada’s third largest, also said it had “robust internal capabilities to implement relevant international standards,” to support its climate strategy and meet regulatory requirements.
National Bank, Canada’s sixth largest lender, said it would streamline how it reports its plans and progress in light of mandatory disclosure requirements.
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 addressed climate risks and has 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Separately, the U.S. Federal Reserve announced it had withdrawn from a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system.
(Reporting by Nivedita Balu in Toronto, Editing by Louise Heavens and Daniel Wallis)
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