Major Canadian banks have decided to withdraw from the Net-Zero Banking Alliance (NZBA) — an alliance created within the framework of the United Nations to achieve carbon neutrality in the banking sector by 2050. This is reported in a press release from the Bank of Montreal ((BMO).
Bank of Montreal became the first Canadian bank to exit the NZBA, joining a number of major American banks, including JPMorgan Chase&Co., Morgan Stanley, Bank of America Corp., Citigroup Inc., Wells Fargo&Co. and Goldman Sachs Group Inc.
Two other key Canadian banks, Toronto—Dominion Bank (TD) and National Bank of Canada, also declined membership in the NZBA, explaining their decision by having sufficient internal resources to achieve their goals. In particular, TD prefers to be flexible in choosing mechanisms and strategies and will continue to support clients and adapt its activities to the requirements of sustainable development, while National Bank intends to focus on a practical approach to decorbanization, including cooperation with large issuers and companies in the field of renewable energy.
The decision of the Canadian banks demonstrates the need to review global climate strategies, taking into account the regional characteristics of participants and the important role of the banking sector in financing climate initiatives, as well as the need to make changes to the structures of climate alliances that may affect financial stability and the availability of funds for environmental projects.
The US Federal Reserve System (US FRS) has decided to withdraw from The Network for Greening the Financial System (NGFS), an international network of central banks and regulators to develop methods for managing climate risks in the financial system, since, from the point of view of FRS management, the expansion of the scope of NGFS activities goes beyond the statutory powers of the central bank, and Decisions in environmental protection policy should be made by the elected branches of government.
NGFS was founded to share best practices and best practices in order to promote the development of environmental and climate risk management mechanisms in the financial sector, as well as to mobilize financing to support the transition to a sustainable economy.
NGFS was established in 2017 and currently includes central banks and regulators from more than 90 countries. The US Federal Reserve became a member of the NGFS in 2020.
The NZBA Alliance is a subgroup of the Glasgow Financial Alliance for Net Zero (GFANZ), an alliance established within the framework of the United Nations in 2021 to support the transition to clean energy through the abandonment of fossil fuels and the introduction of sustainable energy solutions.
The Glasgow Financial Alliance for Net Zero (GFANZ) is a global association of leading financial institutions committed to accelerating the decarbonization of the economy.
