Major US Banks Exit Net Zero Alliance Ahead of Trump’s Inauguration

(8 January 2025 – United States) The six largest banks in the United States have withdrawn from the global banking industry’s net zero target-setting initiative, with Donald Trump’s imminent presidency raising expectations of a political backlash against climate-focused commitments.

JPMorgan Chase recently followed Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs in stepping away from the UN-backed Net Zero Banking Alliance (NZBA), with all six exiting since early December.

Analysts suggest these moves are a pre-emptive response to anticipated “anti-woke” rhetoric from right-leaning US politicians, a sentiment likely to intensify as Trump assumes office as the 47th president in less than two weeks.

Trump’s campaign promises to deregulate the energy sector, roll back environmental protections, and aggressively expand fossil fuel production—summed up by his “drill, baby, drill” mantra—are expected to shape his administration’s energy policies in the world’s largest oil and gas-producing nation.

Convened by the UN Environment Programme finance initiative but led by banks, the NZBA commits members to align their lending, investment and capital markets activities with net zero greenhouse gas emissions by 2050 or earlier.

Citigroup was one of NZBA’s founding members. A spokesperson for the bank said Citigroup’s decision to quit would allow it to “focus on addressing barriers to mobilising capital to emerging markets in support of the low-carbon transition”.

“We remain committed to reaching net zero and continue to be transparent about our progress,” the bank said.

Addressing its withdrawal, JP Morgan said it would “work independently to advance the interests of our firm” and its customers and shareholders, while remaining “focused on pragmatic solutions to help further low-carbon technologies while advancing energy security”.

A spokesperson for Goldman Sachs said the bank was “very focused” on increasingly stringent standards and reporting requirements imposed by regulators, and insisted the bank had “made significant progress … on the firm’s net zero goals”.

Wells Fargo commented only to confirm its withdrawal from the alliance, while Bank of America and Morgan Stanley did not respond to requests for comment.

NZBA currently has 141 members from 44 countries, including European giants such as Banco Santander, Barclays, Deutsche Bank and HSBC. However, there are no just three US members – Amalgamated Bank, Areti Bank and Climate First Bank.

European banks have complained that they’d love the NZBA guidelines to be stronger, but the US members just won’t let it happen. So it is now time for the Europeans to step up and show that they weren’t just using US obstructionism as an excuse for foot-dragging” stated Reclaim Finance Senior Analyst for Energy Transition, Patrick McCully.

“Banks that have pulled out may now reduce their commitments to climate-friendly policies. The key thing to watch will be weakening of their existing targets and policies noting some banks have ambitious targets for decreasing emissions. Still, we do not expect banks to announce publicly any such changes.”