Goldman, Wells Fargo, Citi, and more withdraw
Major US financial institutions, including Goldman Sachs Group Inc., Wells Fargo & Co., Citigroup Inc., Bank of America Corp., and Morgan Stanley, have decided to pull out of the Net-Zero Banking Alliance (NZBA), signaling a big shift in the climate initiatives approach from Wall Street.
The largest US bank, JPMorgan Chase & Co., is expected to do the same.
In a letter to members dated December 31, Sarah Kemmitt, lead of the NZBA Secretariat, acknowledged the difficult political environment and predicted more US departures. The banking sector is increasingly coming under the microscope for its environmental commitments.
"Banks merely reflect the real economy," said head of sustainability and transition strategy at Jefferies Financial Group Inc. Aniket Shah. "So if the real economy remains a hydrocarbon economy, then banks will reflect that too."
Latest figures show that fossil-fuel financing by banks has surged since NZBA's establishment in 2021. Bloomberg information indicates that, in 2024, worldwide banks made a total of fossil-fuel loans and bond deals worth $680 billion. Oil, gas, and coal firms were among the underwriting activities taken on by JPMorgan, as well as Wells Fargo, TD Securities, Bank of America, RBC Capital Markets, and Citigroup.
European financial institutions maintain their commitment to the alliance. "Our position is very straightforward, we have absolutely no intention of leaving the NZBA," stated a Standard Chartered Plc spokesperson. Similar positions have been expressed by ING Groep NV and Deutsche Bank AG.
The departing banks have publicly stated their acknowledgment of decarbonization goals while emphasizing their primary duty to serve client needs. None has provided official reasons for withdrawing from the alliance. The NZBA, formed in 2021, requires members to align their financed emissions with pathways to achieve net-zero by 2050 and establish 2030 interim targets.
Environmental Advocates NY has responded by calling for increased government oversight, suggesting new regulations and laws to compel banks operating in New York to maintain climate action commitments, emphasizing the need for documented emissions reduction and specific financing limits aligned with climate goals.
Could policy changes be on the horizon? Let us know your thoughts.
