RBC is the latest Canadian lender in global climate coalition to withdraw.

A spokesperson for Royal Bank of Canada announced on Friday that the bank is leaving the global banking sector's climate coalition. This follows similar moves by its domestic banking counterparts.

The Net-Zero Banking Alliance was established in 2021 by Mark Carney, former Governor of the Bank of Canada, to encourage financial institutions towards limiting climate change effects and achieving net-zero emission.

The top Canadian banks TD Bank Bank of Montreal National Bank of Canada, Canadian Imperial Bank of Commerce and Bank of Montreal had also been a part of the list.

Already withdrawn

Earlier this month, the alliance announced its formation.

In separate statements, the Canadian banks stated that they are prepared to work independently of the alliance and develop climate strategies.

Canadian banks have faced increasing pressure in recent years to manage climate-related risks that arise from their funding activities.

The banking regulator of the country has also issued guidelines to financial institutions on how they can manage climate-related risk.

Goldman Sachs announced its departure from the alliance on December 6, after being under pressure for months from Republican politicians, who claimed that membership in such coalitions could violate anti-trust laws, especially if they led to reduced funding for fossil fuel companies.

This pressure increased after the Republican sweep of the November U.S. election heralded Donald Trump's return as president. Investors, including BlackRock, have recently faced legal challenges regarding their climate efforts.

Goldman was followed by other US banking giants - Wells Fargo, Citigroup, Bank of America, Morgan Stanley and JPMorgan Chase. (Reporting and editing by Maju Sam in Bengaluru, with Pritam Biwas from Bengaluru)

(source: Reuters)