Japan's SMFG Joins Wall Street-Led Exodus From Climate Group

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(Bloomberg) — Sumitomo Mitsui Financial Group Inc. will leave the banking industry’s main climate-finance alliance, the first major Japanese lender to join an exodus led by institutions from Wall Street and Canada.

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Japan’s second-largest bank has decided to withdraw from the Net-Zero Banking Alliance, a spokesperson said Tuesday. Nikkei had earlier reported the lender’s plan to quit the alliance.

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Banks have exited the United Nations-convened group amid intensifying pressure on lenders operating in the US over what have been characterized as “woke” policies, and in order to win more flexibility from the organization’s climate targets. The NZBA is now reviewing its policies after the departures of members including Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp.

In an emailed comment, NZBA said the alliance remains committed to “supporting members’ efforts to finance the transition to a net-zero emissions economy.” And the strategic review currently being conducted by NZBA “will ensure the alliance continues to evolve to best adjust to changing conditions and support members’ developing needs,” it said. 

Several major European and Asian banks have recently expressed support for the alliance, while the NZBA’s website currently lists more than 130 members from 44 countries.  

Nomura Holdings Inc. is considering exiting the group, Nikkei reported. “We continue to monitor developments around the net zero initiatives,” a Nomura spokesperson said, without specifying if the bank intends to withdraw.

(Adds comment from NZBA in fourth paragraph.)

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