Wall Street breaks with net-zero climate alliance ahead of Trump’s term

Wall Street’s biggest banks simultaneously abandoned the same net-zero climate alliance that came under investigation by Republican lawmakers last year, announced just weeks earlier. President-elect Donald Trump will take office.

Since 2021, the banking giants have been prominent members of the Net-Zero Banking Alliance (NZBA), a global group of financial institutions “committed to financing ambitious climate action” to transition the economy to net-zero greenhouse gas emissions by 2050.

However, since December, six of the world’s largest banks – JP Morgan, Wells Fargo, Goldman Sachs, Morgan Stanley, Citigroup and Bank of America – have separately announced their departure from the alliance, encouraging their member banks to “design, set and achieve” science-based net zero targets.

The banks said they remain committed to emissions reduction targets, but will do so independently.

A POSSIBLE SECOND WITHDRAWAL FROM THE PARIS CLIMATE TREATY COULD BE DIFFERENT THAN THE FIRST US EXIT.

JPMorgan Chase & Co. sign and building exterior seen in New York City. (Plexi Images)

“We will continue to work independently to advance the interests of our company, our shareholders and our clients and remain focused on pragmatic solutions to help advance low-carbon technologies while advancing energy security,” said a JP Morgan spokesperson, the latest bank to withdraw. of the alliance, he said in a statement.

BlackRock, the world’s largest investment firm, also announced Thursday that it would split from a major climate group, the Net Zero Asset Managers Initiative, which works with asset managers to achieve net-zero emissions by 2050 or sooner.

The synchronicity of the departures comes just weeks before Trump, who is expected to break with President Biden. greenhouse gas emissions reduction target and potentially withdraw from the Paris Climate Agreement, will assume the presidency.

A Wall Street sign in front of the New York Stock Exchange in New York City on Wednesday, July 31, 2024. (Michael Nagle)

“The sudden exodus of these big US banks out of the NZBA is a makeshift effort to avoid criticism from Trump and his climate denier cronies,” said Paddy McCully, senior analyst at Reclaim Finance, The Guardian reported.

“A few years ago, when climate change was at the forefront of the political agenda, banks were eager to boast about their commitments to act on climate,” McCully added. “Now that the political pendulum has swung in the other direction, suddenly acting on climate doesn’t seem so important to Wall Street lenders.”

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The departures come nearly a year after a group of House Republicans launched a probe to the six banks for their participation in the international alliance over accusations that it could affect the agricultural sector.