With President Donald Trump's inauguration looming and political backlash expected over climate action, all six major U.S. banks have withdrawn from the global banking industry's net-zero goal-setting group.
JPMorgan is the latest to leave the United Nations-backed Net Zero Banking Alliance (NZBA), joining Citigroup, Bank of America, Morgan Stanley, Wells Fargo and Goldman Sachs. All six have left the company since the beginning of December.
Analysts say the withdrawal is an attempt to fend off “anti-woke” attacks by right-wing U.S. politicians, which are expected to intensify when Trump becomes the 47th president in less than two weeks. states.
President Trump's pledge to deregulate the energy sector, eliminate environmental regulations and “drill, baby, drill” was a big part of his campaign platform, as he seeks to govern the world's largest oil and gas producer. is expected to form an important part of his blueprint.
Paddy McCurry, senior analyst at campaign group Reclaim Finance, said: “The sudden withdrawal of these large US banks from the NZBA is meant to avoid criticism from President Trump and his circle of climate change deniers.'' “It's a tremendous effort.”
“A few years ago, when climate change was at the forefront of the political agenda, banks were eager to boast about their efforts to tackle climate change. Now that the political pendulum has swung in the other direction, Wall Street financial For businesses, suddenly it doesn't seem that important to deal with climate change.”
Convened by the United Nations Environment Programme's Finance Initiative and led by banks, the NZBA commits member countries to aligning their lending, investment and capital market activities with the aim of achieving net-zero greenhouse gas emissions by 2050. There is.
Citigroup was one of the founding members of the NZBA. A spokeswoman for the bank said Citigroup's decision to withdraw “allows us to focus on addressing barriers to mobilizing capital into emerging markets that support the low-carbon transition.”
“We remain committed to achieving net zero and will continue to be transparent about our progress,” the bank said.
In its exit, JPMorgan said it would “work independently to advance the interests of the company, its customers and shareholders,” while “focusing on practical solutions that support further low-carbon technologies while promoting energy security.” I will continue.''
A Goldman Sachs spokesperson said the bank is “very focused” on the increasingly stringent standards and reporting requirements imposed by regulators, adding that the bank is making “significant progress toward its net-zero goal.” We have made progress,'' he said.
Wells Fargo commented only to confirm its departure from the partnership, while Bank of America and Morgan Stanley did not respond to requests for comment.
Carbon Trust senior manager Toby Kwan said the bank's withdrawal from the NZBA would give it more flexibility in which sectors to include in its targets and which path to follow, and potentially ease deadlines to work towards. He said there is.
After newsletter promotion
Financial institutions' membership in the Net Zero Alliance has come under attack from the country's right-wing politicians. In 2022, some US banks have threatened to withdraw from the NZBA due to potential antitrust lawsuits led by Republican state attorneys general, but the group's concerns about what could be interpreted as requirements for action on fossil fuels have led some US banks to threaten to withdraw from the NZBA. A change in certain guidelines prevented the withdrawal.
Then in November, A group of states led by Texas sued BlackRock, Vanguard, and State Street.all of the major asset management companies cited climate change policies to reduce dependence on coal, which the plaintiffs say has driven up energy prices.
Most recently, in December, the Republican-led Judiciary Committee of the U.S. House of Representatives found that a “cartel” of financial companies and climate change activists were colluding to “impose radical ESG goals” on U.S. companies. denounced.
Since Tuesday, after the withdrawal of US banks, the NZBA still counts 141 banks as members, including all of Europe's biggest banks. McCurry said the withdrawal of U.S. banks will give those that remain an opportunity to further advance. “By reinforcing their commitments, NZBA banks can show they are not using US interference simply as an excuse to maintain the NZBA's weak position,” he said.
Mr Kwan said US bank losses were by no means a harbinger of death for the NZBA. “While the departure of these large financial institutions from the alliance puts a question mark over the future of climate action in the financial sector, the remaining NZBA members represent a significant part of the global banking sector and It controls about 40% of assets, or $64 trillion.” [£51tn]” he said. “This huge impact cannot be underestimated and will enable NZBA member countries to drive the transition to a net-zero economy.”
The NZBA did not comment.
