“Major US Banks Withdraw from Global Net Zero Banking Alliance Amid Political Backlash – What This Means for Climate Action”

Six of the largest banks in the United States have withdrawn from the global Net Zero Banking Alliance (NZBA) in light of the political climate surrounding climate action. The recent exits include JP Morgan, Citigroup, and Bank of America, as well as Morgan Stanley, Goldman Sachs, and Wells Fargo.

JP Morgan, in a statement provided to ESG Today, announced their decision to leave the NZBA, citing a focus on advancing low-carbon technologies and energy security independently. This move follows a trend in the finance industry, with similar groups experiencing mass exodus due to political pressure. The Glasgow Financial Alliance for Net Zero (GFANZ) has emerged as an umbrella organization for finance industry net zero initiatives, distancing itself from other alliances and offering guidance to firms regardless of their commitment to net zero goals.

Analysts suggest that the banks’ withdrawals are a response to anticipated backlash from right-wing politicians in the United States, particularly with the inauguration of Donald Trump. Trump’s campaign promises to deregulate energy and prioritize oil and gas production are expected to influence the financial sector’s approach to climate action.

Despite the departures of major U.S. banks, 141 banks remain members of the NZBA, including all of the largest banks in Europe. The remaining members control a significant portion of global banking assets, representing an opportunity to drive the transition to a net zero economy. While the loss of U.S. banks raises questions about the future of climate action in the financial sector, the remaining members have the potential to advance further and make a substantial impact.

Overall, the withdrawals from the NZBA reflect a shifting political landscape and the challenges faced by financial institutions in balancing climate commitments with political pressures. The future of climate action in the banking sector remains uncertain, but the remaining members of the NZBA have the opportunity to lead the way towards a net zero economy.