Major banks defend climate strategies as investors push for transparency and stronger 2030 targets
Canadian asset owners managing about $53bn in holdings are urging financial institutions to follow through on their net-zero commitments, according to BNN Bloomberg.
In an open letter, 34 organizations, including the Trottier Family Foundation, the Canada Post Pension Plan, the United Church of Canada, and the University of Victoria, expressed disappointment over the country’s major banks withdrawing from key climate initiatives.
The six largest banks—RBC, TD, BMO, CIBC, Scotiabank, and National Bank—left the UN-backed Net-Zero Banking Alliance (NZBA) in January 2025.
Their departure followed similar moves by major US banks before Donald Trump’s inauguration.
As reported by Reuters, asset owners argue that remaining in alliances like the NZBA and the Net Zero Asset Managers Initiative provides a baseline for accountability, ensuring transparency and comparability in climate reporting.
The signatories expect banks to uphold their commitments to reach net-zero emissions by 2050. They also call on financial institutions to set “robust” 2030 targets and issue standardized annual progress reports.
Daily Climate reports that investors believe these measures are necessary to maintain trust and credibility in the sector’s climate commitments.
Canadian banks that exited the NZBA defend their decision, stating they can meet climate targets without external oversight.
BMO, the first Canadian bank to leave the alliance, emphasized its ability to adhere to international climate standards and regulatory requirements, according to Reuters.
The bank stated it remains committed to supporting clients in their transition to net zero.
The shift away from climate alliances is not exclusive to Canada.
As ESG Today reports, major US banks, including JPMorgan Chase, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, and Morgan Stanley, also withdrew from the NZBA.
These exits have raised concerns about the banking sector’s role in climate action.
The political landscape has also influenced these decisions. Reuters reports that on January 17, the US Federal Reserve announced its withdrawal from the Network of Central Banks and Supervisors for Greening the Financial System (NGFS), citing an expanded scope beyond its mandate.
This move aligns with Republican viewpoints in Congress and follows similar actions from private sector entities, including banks exiting net-zero alliances.
Despite these shifts, asset owners and environmental advocates stress the importance of collective action and standardized climate reporting.
They argue that remaining in alliances like the NZBA reinforces accountability and transparency, both essential for meeting global climate goals.
