The Net Zero Banking Alliance is losing members left and right, signaling an unwillingness among financial institutions to commit to reducing pollution.
What's happening?
BMO, National Bank, TD Bank Group, and CIBC said in January they had joined the six largest American banks in withdrawing, The Canadian Press reported via the Canadian Broadcasting Corporation.
"Financial institutions are pulling back following sustained criticism from U.S. Republicans on various climate alliances and the very concept of factoring environmental risks into their business operations," the outlet stated.
The news agency noted the Canadian banks "said they are able to continue with their climate work without the help of the group." CIBC pointed out that banks have been engaging in efforts to make their work greener for a while.
"Having made significant progress alongside our clients in these areas, we are now well-positioned to further this work outside of the formal structure of the NZBA," said CIBC spokesperson Tom Wallis.
Why is this important?
Banks support Big Oil and other industries that are responsible for the changing climate. Without the ability to borrow billions of dollars, companies such as Saudi Aramco, Shell, and BP might feel more pressure to step back from their reliance on dirty energy and turn toward clean renewables. Since 2016, the 60 largest commercial and investment banks have given $4.6 trillion to oil and gas conglomerates.
The alliance was formed as part of the Glasgow Financial Alliance for Net Zero, which garnered more than 160 signatories at the 2021 United Nations Framework Convention on Climate Change, known as COP26, in Scotland.
The banks promised to change how they lend, invest, and otherwise do business to drastically lower heat-trapping gas pollution by 2050, according to the report.
"We have robust internal capabilities to implement relevant international standards, supporting our climate strategy and meeting regulatory requirements," BMO spokesperson Jeff Roman said.
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Definitely 👍 What's being done about banks' change in tune?
Greenpeace took the lead in criticizing the finance industry, calling the pullouts more than "a craven act of cowardice on climate."
"If we want to avoid more communities being burned or flooded in climate-fuelled disasters by moving big money out of fossil fuels and into climate solutions, then we need governments to regulate banks the same way they do smokestacks and tailpipes," Greenpeace senior energy strategist Keith Stewart told The Canadian Press.
The alliance was already questionable before this move, so this could be the beginning of the end. To help push for change, you can switch to a greener bank — here's how and some options.
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