The Net-Zero Banking Alliance, co-founded by Prime Minister Mark Carney in 2021 to combat climate change, has decided to disband. A representative of the UN-supported alliance disclosed that members voted to terminate the membership system and instead rely on the climate recommendations formulated by the group. Consequently, the alliance is ceasing its operations immediately.
Mark Carney played a pivotal role in establishing the alliance as the UN Special Envoy for Climate Action and Finance before the UN climate conference in Glasgow in 2021. Morningstar DBRS recently highlighted the increasing importance for banks to assess climate risks effectively to address the challenges posed by more frequent extreme weather events.
The alliance, which once boasted over 140 global banks, including Canada’s major banks, pledged to establish short and long-term decarbonization goals to expedite emissions reductions. However, mounting political pressure, particularly from U.S. Republicans following Donald Trump’s election, prompted several U.S. banks to exit the alliance. Subsequently, Canadian banks, such as RBC, TD, Scotiabank, BMO, CIBC, and National Bank, withdrew from the group in January, expressing their commitment to continue climate initiatives independently.
Despite the dissolution of the alliance, the frameworks developed by the group, including guidelines on setting climate targets for banks, will remain accessible. Efforts are ongoing to determine the most effective way to advance climate finance initiatives, as per the alliance spokesperson.
