RBC becomes latest Canadian lender to quit global climate coalition #CanadaFinance

(Reuters) -Royal Bank of Canada is exiting the global banking sector climate coalition, a spokesperson for the lender said on Friday, after a similar move by domestic banking peers.

The Net-Zero Banking Alliance, a UN-sponsored initiative set up by former Bank of Canada Governor Mark Carney, was launched in 2021 to encourage financial institutions to limit the effects of climate change and push toward achieving net-zero emissions.

Other top Canadian banks – TD Bank Bank of Montreal National Bank of Canada and Canadian Imperial Bank of Commerce had already withdrawn from the alliance earlier this month.

The Canadian banks said in separate statements that they were equipped to work outside the alliance and develop their climate strategies.

In recent years, Canadian banks have been under increasing pressure to address climate-related risks resulting from their funding activities.

The country’s banking regulator has also introduced guidelines for financial institutions to manage their climate-related risks.

The departures from the alliance began with Goldman Sachs’ announcement on Dec. 6 after months of pressure from some Republican politicians who said membership of such coalitions, particularly if it led to reduced financing for fossil fuel companies, could breach anti-trust rules.

Such pressure stepped up after a Republican clean sweep in November’s U.S. elections heralded the return of Donald Trump as president, with investors including BlackRock recently facing legal challenges over their climate efforts.

Goldman’s move was then followed by the other banking giants in the United States – Wells Fargo , Citigroup, Bank of America, Morgan Stanley and JPMorgan Chase .

(Beter by Pritam Viswing In Begalugu; Edding by Maju Samuel)