Canadian banks join a global net zero alliance

The Net-Zero Banking Alliance

On October 15 Canada’s so-called Big Six banks joined a global net zero alliance led by former Bank of Canada Governor Mark Carney. Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia and TD Bank have joined the industry-led Net-Zero Banking Alliance. It is part of a wider organization called the Glasgow Financial Alliance for Net-Zero, whose chair is Carney.

The banking alliance members commit to making their lending and investment portfolios consistent with net zero emissions by 2050, publishing emissions data, and making use of carbon offsets. They will also set intermediate net zero targets by 2030 or sooner.

Banks provide loans to many industries, including fossil fuels and renewables. Indeed, this alliance is happening in the leadup to the United Nations climate summit in Glasgow, which begins October 31, and where one of the themes will be how to finance the various climate commitments.

The Big Six join 63 other banks from 32 countries in the alliance, which launched in April, representing 40 trillion USD in assets. Before last week, the only Canadian member was Vancouver City Savings Credit Union (Vancity).

What does this all mean?

Many banks had previously made individual net zero commitments, and their membership in the alliance could be a signal that the banks are serious about taking action on climate change. However, like many other climate pledges, this one is sparse on details, more of which are hopefully forthcoming as the alliance takes shape.

Some activist groups say the alliance does not go far enough, and must be more ambitious. Examples of further actions include phasing out fossil fuel funding, ceasing financing of new fossil fuel projects, and halving financed emissions by 2030.

As with the other net zero alliances covered on this site, we will continue monitoring this story as it evolves, so stay tuned for more!