Canada’s Biggest Banks Join Wall Street-Led Exodus From Climate Alliance
- Jackie De Burca
- February 3, 2025
Canada’s Biggest Banks Join Wall Street-Led Exodus From Climate Alliance
Canada’s biggest banks have left the Net-Zero Banking Alliance, joining Wall Street banks like Goldman Sachs and JPMorgan1. This move is big news for the environment and banking. It shows how hard it is to tackle climate change1.

This decision worries many about the planet’s future. It makes it harder for banks to help the environment1. The Net-Zero Banking Alliance was set up in 2021 to help banks cut their carbon footprint. Now, reaching their goal of net-zero by 2050 seems even more difficult1.
Key Takeaways
- Canada’s six biggest banks have withdrawn from the Net-Zero Banking Alliance, citing concerns over climate change mitigation efforts.
- The exodus from the Net-Zero Banking Alliance is part of a larger trend, with major Wall Street banks and investment management corporations also leaving the alliance.
- The move has significant implications for the environment and the banking sector, highlighting the challenges of addressing climate change.
- The Net-Zero Banking Alliance was established in 2021 to encourage financial institutions to limit their environmental footprint and aim for net-zero emissions by 2050.
- The exodus from the alliance has raised concerns about the impact on the environment and the ability of financial institutions to support sustainable development.
- BlackRock, the world’s largest investment management corporation, manages approximately $11.5 trillion in assets and has also withdrawn from the Net-Zero Asset Managers alliance1.

The Growing Exodus From Climate Alliance: A Global Perspective
The world is seeing a big change as banks from everywhere are thinking again about sustainability and net-zero emissions. This isn’t just happening in Canada. Big banks in New York have also stepped back from the alliance2. Recently, six big U.S. banks, like JPMorgan Chase and Bank of America, left the Net-Zero Banking Alliance (NZBA)3.
Some important numbers show how big this change is:
- Over 70 investors have left Climate Action 100+ since investigations by House Republicans began3.
- 14 Republican state attorneys general started looking into the six banks that left the NZBA3.
- Almost all the banks that left said they still want to meet sustainability goals3.
The Net-Zero Banking Alliance (NZBA) had 145 banks from over 40 countries. These banks had more than $70 trillion in assets2. The Glasgow Financial Alliance for Net Zero (GFANZ) is now focusing on helping low-carbon energy and economic changes in poorer countries2. As we aim for net-zero emissions, we must understand the challenges of fighting climate change.
Canadian Banking Sector's Dramatic Shift
The Canadian banking sector leaving the climate alliance is a big blow to fighting climate change4. This move has big effects on the environment and the economy. The banking sector is key in shaping the country’s energy future. By leaving, they show they don’t see climate change as a top issue anymore.
The environmental impact of this change is huge. The Canadian banks are big backers of fossil fuel projects. Their actions will harm the environment a lot. The sector is changing how it views sustainability due to growing demands for it to be more green4.
Some major worries about this change include:
- More greenhouse gas emissions
- Bad effects on sustainable development
- Less clear environmental reports

The banking sector’s move away from the climate alliance is a big deal. It will affect the environment and economy for a long time. As the sector changes, it’s crucial to think about its role in the country’s energy future and how it can reduce its environmental impact4.
Driving Forces Behind the Mass Departure
Major financial institutions leaving the climate alliance is a complex issue. It’s driven by various factors. Canada’s biggest banks have left the UN-backed climate alliance. This is part of a wider trend where financial institutions are stepping back from climate commitments5.
This shift shows a big change in how companies deal with climate action5.
Political pressure, regulatory challenges, and changing business strategies are key reasons. Political pressure has been a big factor. Many financial institutions have faced criticism for their climate work. Also, regulatory challenges have made it hard for them to follow climate rules.
Key Factors Contributing to the Exodus
- Political pressure: Many financial institutions have faced criticism for their involvement in climate-related initiatives, leading to a re-evaluation of their commitments.
- Regulatory challenges: The complex landscape of climate-related regulations and compliance issues has made it difficult for financial institutions to navigate and implement sustainable practices.
- Business strategy realignment: Financial institutions are increasingly prioritizing short-term financial performance over long-term sustainability commitments, leading to a decrease in investments in climate-related initiatives5.
Understanding why financial institutions are leaving climate alliances is crucial. By looking at the different factors, we can see the challenges and chances to tackle climate change. This helps us support sustainable practices in the financial world.

Impact on Global Climate Finance Initiatives
The big banks leaving the Net-Zero Banking Alliance (NZBA) is a big blow to global climate finance. It makes it harder for banks to help with sustainability and reach net-zero emissions6. This could really hurt our efforts to cut down greenhouse gas emissions and move to a cleaner economy. The six biggest U.S. banks leaving the NZBA hold a big chunk of the financial sector’s assets7.
The NZBA started with 136 banks from 44 countries, with assets worth $57 trillion7. Banks joining must promise to be net-zero by 2050. But, some say this goal is too slow, given how fast the world’s carbon budget is shrinking7. The goals include cutting down on all kinds of emissions, including those from clients’ activities7.
The big banks leaving has serious effects on global climate finance:
- Less money for green energy and sustainable projects
- More use of fossil fuels and more emissions
- Harder for banks to meet net-zero emissions targets
Conclusion: Future of Climate Commitments in Banking
The banking world needs to show it’s serious about fighting climate change10. Banks must work together to win back trust, create new green finance ideas, and match their plans with global climate goals. This way, the banking sector can be a leader in moving to a cleaner economy.
To read some more positive news Ecuador Climate Finance has made a big step by getting a $30 million REDD+ agreement with LEAF
FAQ
What are the key implications of Canada’s biggest banks joining the Wall Street-led exodus from the Net-Zero Banking Alliance?
What is the global context of the exodus from the climate alliance?
What are the implications of the Canadian banking sector’s dramatic shift away from the climate alliance?
What are the driving forces behind the mass departure from the climate alliance?
What is the impact of the exodus on global climate finance initiatives?
Source Links
- Canada Banks Join Wall Street-Led Exodus From Climate Alliance – https://earth.org/canadas-biggest-banks-join-wall-street-led-exodus-from-climate-alliance/
- Big bank exodus from climate alliance chided as ‘disgraceful’ – https://trellis.net/article/exodus-by-big-banks-from-climate-finance-alliance-chided-as-disgraceful-reversal/
- Why climate alliance memberships are no longer ‘en vogue’ for Wall Street – https://www.esgdive.com/news/why-climate-alliance-memberships-are-no-longer-en-vogue-for-wall-street-banks/738838/
- PDF – https://www.mcgill.ca/business-law/files/business-law/2023tblsaimpactpaper_final_0.pdf
- PDF – https://www.preventionweb.net/media/98568/download
- Is Net-Zero Banking Dead? – https://environment.yale.edu/news/article/net-zero-banking-dead
- Green banks’ coalition goes bust: Biggest American fossil funders exit Net Zero alliance – https://www.downtoearth.org.in/climate-change/green-banks-coalition-goes-bust-biggest-american-fossil-funders-exit-net-zero-alliance
- Banks Ditch Net Zero as Climate Alliances Crumble | OilPrice.com – https://oilprice.com/Energy/Energy-General/Banks-Ditch-Net-Zero-as-Climate-Alliances-Crumble.html
- The anti-ESG movement scores a big win against net-zero finance – https://www.corporateknights.com/category-finance/anti-esg-movement-scores-win-against-net-zero-finance/
- Sustainable Finance – https://www.sierraclub.org/issues/climate/sustainable-finance?_wrapper_format=html&page=3