Five of the largest banks in Canada – TD Bank, Bank of Montreal, National Bank of Canada, Canadian Imperial Bank of Commerce and Scotiabank – have joined their US counterparts in leaving the UN-convened Net Zero Banking Alliance (NZBA).

According to its website, the NZBA aims to bring together banks committed to “aligning their lending, investment and capital markets activities with net-zero greenhouse gas emissions by 2050”.

The banks’ exits took place in short succession earlier this month, less than two weeks after JP Morgan became the latest US bank to depart from the alliance.

The move leaves only six North American banks as members, and only one – Royal Bank of Canada (RBC) – with over US$1bn in annual revenue. RBC mooted exiting the alliance in early January, as reported by Bloomberg, but remains a member at the time of publication.

“Pulling out of NZBA, hypothetically, doesn’t lead to a non-commitment to net zero or climate change,” RBC chief executive Dave McKay said at an industry event at the time.

“It just means that mechanism, that organisation that fostered oversight and policies and rules around what you can and can’t do and how you report, maybe that isn’t the right mechanism to do it.”

The NZBA has faced criticism from NGOs, too, with finance-focused civil society group BankTrack describing it in public statements as an “alliance that has been stalled by the lack of ambition of US banks”, and claiming that it “does not ensure that its members are credibly planning to transition to net-zero emissions banking”.

Nonetheless, many activists are critical of banks leaving the alliance.

Canadian climate campaign organisation Stand.Earth released a statement from its finance director saying: “We told you so. Canadian banks entered the NZBA to greenwash their fossil fuel financing and to gain cover under increasing pressure from customers and investors.

“It appears they misled investors about their intentions with the alliance. While the world is on fire, quitting even mediocre climate initiatives is an out of touch move that shareholders, workers, and regulators should pay close attention to.”

The group also notes that two of the banks that exited the alliance – TD Bank and Scotiabank – made the so-called “dirty dozen” in 2023, being among the 12 largest fossil fuel financing banks in the world, according to the report Banking on Climate Chaos.

In statements to GTR, spokespeople from TD Bank and Bank of Montreal confirmed their exit.

TD Bank’s spokesperson adds: “We have the resources, relationships and capabilities to continue to advance our strategy, deliver for our shareholders, and advise our clients as they adapt their businesses and seize new opportunities.”

BMO says: “We have robust internal capabilities to implement relevant international standards as part of our climate strategy and in support of our business objectives and regulatory requirements – supporting our ambition to be our clients’ lead partner in the transition to a net zero world.”

The remaining three banks that exited the alliance did not respond to requests for comment by the time of publication.