RBC and BMO reassess their NZBA memberships as voluntary climate alliances face mounting challenges
Royal Bank of Canada (RBC) and other major Canadian banks may consider withdrawing from the Net-Zero Banking Alliance (NZBA), according to BNN Bloomberg.
At an industry conference in Toronto hosted by RBC, CEO Dave McKay acknowledged that the bank is re-evaluating its membership in the NZBA.
McKay said, “Pulling out of NZBA, hypothetically, doesn’t lead to a non-commitment to net zero or climate change. It just means that mechanism, that organization that fostered oversight and policies and rules around what you can and can’t do and how you report, maybe that isn’t the right mechanism to do it.”
Recent weeks have seen major US banks, including Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of America, Citigroup, and JPMorgan Chase, exit the alliance.
These departures align with increasing Republican criticism of ‘woke’ capitalism and claims that such voluntary alliances have failed to achieve significant reductions in greenhouse gas emissions.
Bank of Montreal CEO Darryl White, speaking at the same event, said, “We are still a member of the alliance. At least we are today.”
White reaffirmed BMO’s commitment to a low-carbon economy while emphasizing the bank’s continued support for its traditional energy clients. “We won’t abandon that,” he added.
As of Wednesday, NZBA’s website still listed RBC and BMO as members. A spokesperson for the alliance declined to comment.
US banks that have exited the NZBA maintain their net-zero emissions goals and support for clients’ carbon reduction efforts.
Canadian banks, however, remain significant financiers of fossil fuels.
In 2024, RBC, BMO, Toronto-Dominion Bank, and Canadian Imperial Bank of Commerce ranked among the world’s top 10 lenders for oil, gas, and coal projects, according to Bloomberg data.
JPMorgan Chase provided the most fossil-fuel financing last year.
Keith Stewart, a senior energy strategist at Greenpeace Canada, criticized the effectiveness of voluntary alliances like the NZBA.
He argued, “If we want to avoid ever-more communities burning from climate-fueled wildfires or submerged in record flooding, then governments must regulate the sector to move the money out of fossil fuels and into climate solutions.”
The Canadian Bankers Association stated that decisions regarding NZBA membership are made independently by its members.
A spokesperson explained that Canadian banks implement and report on climate strategies tailored to local regulatory requirements.
Similar defections have affected other net-zero initiatives in the financial industry.
In 2023, a net-zero group for insurers experienced a wave of exits due to litigation threats from US Republicans.
High-profile departures also hit the Climate Action 100+ investor group, with asset management divisions of Goldman Sachs, JPMorgan Chase, and Pacific Investment Management Co. leaving. Vanguard Group exited a net-zero alliance for asset managers in 2022.
