The Biggest US Banks Have All Backed Out of a Commitment to Reach Net Zero

This story originally appeared on Grist and is part of the Climate Desk collaboration.

In the lead-up to Inauguration Day, all six of the United States’ largest banks backed away from a United Nations–sponsored climate initiative amid attacks from conservative lawmakers and regulators.

Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo left the Net Zero Banking Alliance between December and January in what was perceived to be a concession to right-wing criticism of so-called ESG—decisionmaking driven by environmental, social, and corporate governance considerations. Nineteen Republican attorneys general had issued “civil investigative demands” to those banks in 2022, demanding that they turn over information about their ESG practices. They argued that the alliance was beholden to “the woke climate agenda” and that it violated antitrust laws.

While the banks’ exodus from the alliance certainly looks like a setback for the banking sector’s climate progress, environmental advocates say it is a reminder that voluntary initiatives have never been sufficient to drive the sector’s decarbonization.

“There are other levers that we can use to hold banks accountable,” said Allison Fajans-Turner, a senior energy finance campaigner at the nonprofit Rainforest Action Network, which publishes an annual report on how much money banks commit to fossil fuel projects. In light of the Trump administration’s pro-oil-and-gas agenda, she said that over the next four years, activists and policymakers will have to keep the pressure on and, critically, push for stricter legislation at the state and international levels.

“It is quite clear that major US banks will not police themselves,” she added.

The Net Zero Banking Alliance, or NZBA, launched in 2021 under the aegis of the United Nations Environment Programme Finance Initiative and has about 140 members after the six American banks—and four Canadian ones—exited. The alliance asks member banks to commit to achieving net-zero greenhouse gas emissions across their operations and “lending and investment portfolios” by 2050, and to set intermediary emission-reduction targets for 2030 and every five years thereafter. It also asks banks to disclose their annual emissions and sets some recommendations to limit the application of carbon offsets toward banks’ climate goals.