BlackRock, JPMorgan Chase, Morgan Stanley, Citi, Bank of America, Wells Fargo, and Goldman Sachs exit banking alliances to reduce emissions.
Just as leading tech sector entrepreneurs like Mark Zuckerberg and Elon Musk aligned with newly elected President Donald Trump, major banks and fund managers have shed their climate-friendly facades, taking advantage of the denialist stance of the new administration on the climate crisis. On Wednesday, JPMorgan announced it is withdrawing from the Net-Zero Banking Alliance (NZBA). The bank joins Bank of America, Morgan Stanley, Goldman Sachs, Citigroup, and Wells Fargo, which had already exited the agreement in December.
The NZBA, established in 2021, formed a coalition within the financial sector to align banks’ activities—such as investments and lending—with the mission of achieving net-zero greenhouse gas emissions by 2050. However, as it became evident that the White House would be governed by a denialist administration, major financial institutions began abandoning their climate commitments.
This is not the only financial institution coalition experiencing an exodus following Trump’s victory. The Net-Zero Asset Managers Initiative (NZAMi) is another alliance of major fund managers aiming to reduce emissions through the investments of their clients and beneficiaries. BlackRock announced on January 9 that it would exit the initiative. Membership in the group “caused confusion about BlackRock’s practices and subjected us to legal investigations by multiple public officials,” the company explained to clients in a letter sent Thursday.
The decision by the fund, led by Larry Fink, comes after the Republican Party targeted BlackRock for adopting “woke policies.” Trump’s victory has placed major banks under the Republican spotlight, leading them to abandon their climate investment policies and alliances to align with the new administration. “BlackRock held out as long as it could, but the pressure became too great, and the legal and reputational risks too high, even before Trump’s inauguration,” explained Hortense Bioy, director of sustainable investments at Morningstar Sustainalytics, in a statement released by Bloomberg. “BlackRock won’t be the last financial institution to exit the NZAMi,” she added.
It is even more scandalous that the withdrawal from these agreements and the abandonment of climate policies by financial institutions are occurring as the United States experiences some of the worst wildfires in its history. The California fires have already caused ten deaths and over 200,000 people to be evacuated from their homes. “The fires in Los Angeles are not just a tragedy; they are a crime,” said Jamie Henn, director of Fossil Free Media. “This is exactly the kind of disaster Exxon’s own scientists predicted more than 50 years ago but spent billions to keep us addicted to fossil fuels,” Henn added.
With the departure of major U.S. banks, both agreements are significantly weakened—at least across the Atlantic. Leading European banks and fund managers remain in the alliances, but the shift to the far right in many European governments, the exit of major U.S. banks, and Trump’s growing influence among EU Member States may jeopardize the already fragile climate finance agreements.
Esquerda, 20/01/2025
