Potential Migration of Canadian Banks to New Zealand Bankers' Association

Big banks in the US recently left the Net Zero Banking Alliance (NZBA), and the heads of two major Canadian banks are considering a review of their membership in this climate organization.

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2025 September 1 . 12:25 PM

2 min read

Possibility of Canadian banks departing along with New Zealand counterparts?

Potential Migration of Canadian Banks to New Zealand Bankers' Association

In a significant move, RBC, Canada's seventh-largest global lender to the fossil fuel sector, has withdrawn from the Net Zero Banking Alliance (NZBA). This decision, announced by RBC CEO Dave McKay at the RBC Capital Markets 2025 Conference, has sparked debate about the bank's commitment to tackling climate change.

The NZBA, an alliance of banks aiming to align with the Paris Agreement by committing to net-zero financed emissions by 2050, has faced criticism for its approach. Critics argue that the "net zero" term allows continued fossil fuel financing offset by dubious compensation schemes, and the long 2050 timeline delays urgent climate action.

RBC's exit from the NZBA is not necessarily a renunciation of addressing climate change, but rather a sign of dissatisfaction with the alliance's approach and a desire to pursue alternative strategies. The bank's CEO, Dave McKay, downplayed the significance of leaving the New Zealand Business Council for Sustainable Development (NZBA), suggesting it might not indicate a lack of commitment to tackling climate change.

However, RBC's continued financing of fossil fuel expansion has been a point of contention. According to the latest Banking on Climate Chaos report, over the last decade, RBC has provided approximately $256.4bn in loans to the fossil fuel industry. This fact, coupled with the bank's increasing focus on expanding in the US market, raises questions about its climate strategy.

The upcoming federal election in October 2025, following the resignation of Justin Trudeau, may have implications for RBC's climate change policies and the broader Canadian political landscape. Pierre Poilievre, leader of the Conservative party, is currently leading in the polls and is expected to push back against Liberal climate policies such as the carbon tax and the oil and gas emissions caps.

Environmental campaigners have expressed concerns about the acceptance of members with high exposure to the fossil fuel sector in the restructured GFANZ. Richard Brooks, climate finance director at Stand.earth, has criticized RBC for entering the NZBA to greenwash fossil fuel financing.

Meanwhile, Bank of Montreal (BMO) remains a member of the NZBA, according to Darryl White, CEO of BMO (as reported by BNN Bloomberg). Unlike Donald Trump, Poilievre has so far been cautious about taking a strong stance on climate issues.

In conclusion, while RBC's exit from the NZBA does not conclusively prove a lack of commitment to tackling climate change, it indicates dissatisfaction with the NZBA’s approach and a desire to pursue alternative strategies. Without explicit statements from RBC’s CEO clarifying new targets or plans, the withdrawal remains a ambiguous sign, open to interpretation as either a strategic shift or a retreat from established climate leadership commitments.