By Nivedita Balu
TORONTO (Reuters) – Bank of Montreal said on Friday it was withdrawing from the Net-Zero Banking Alliance (NZBA), making it the first Canadian lender to quit one of the world’s top banking sector climate coalitions.
BMO’s action follows that of U.S. lenders that have been rushing in the past two months to quit the climate coalition amid rising U.S. political pressure.
Goldman Sachs broke ranks to announce on Dec. 6 it was leaving NZBA and was soon followed by Wells Fargo, Citi, Bank of America, Morgan Stanley and JPMorgan.
“We are fully committed to our climate strategy and supporting our clients as their lead partner in the transition to a net zero world,” BMO said in a statement.
The lender, Canada’s third largest, said it had “robust internal capabilities to implement relevant international standards,” to support its climate strategy and meet regulatory requirements.
The NZBA was launched in 2021 to encourage financial institutions to limit the effects of climate change.
Canadian banks have faced mounting pressure to address climate-related risks arising from their funding activities in the past few years.
The country’s banking regulator has also addressed climate risks and has introduced guidelines for financial institutions to manage their climate-related risks.
Separately, the U.S. Federal Reserve announced it had withdrawn from a global body of central banks and regulators devoted to exploring ways to police climate risk in the financial system.
(Reporting by Nivedita Balu in Toronto, Editing by Louise Heavens)
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