U.S. Banks Retreat from Climate Coalition: A Fossil Fuel Reversion?

Major U.S. banks, including Goldman Sachs and Wells Fargo, have exited the Net-Zero Banking Alliance, a move scrutinized by climate activists. This withdrawal raises concerns about their commitment to climate action amid political pressures. The banks reaffirm commitments to a low-carbon economy but prioritize fossil fuel financing.

In a significant move sparking criticism from environmental advocates, major U.S. banks have recently withdrawn from the Net-Zero Banking Alliance (NZBA), a key global climate initiative in the banking sector. This development came following warnings from Republican politicians against potential antitrust violations due to reduced fossil fuel financing.

Goldman Sachs led the exit, followed by Wells Fargo, Citi, Bank of America, and Morgan Stanley, leaving JPMorgan as the sole major U.S. bank remaining in the coalition. The withdrawal signals a potential weakening commitment to climate-friendly policies, despite banks asserting continued support for a low-carbon transition.

The exits occur amid broader political backlash against environmental, social, and governance investing, escalating since Donald Trump's return to the political scene. Analysts underscore that the banks' financial interests in fossil fuels remain a priority, as demonstrated by recent income analyses.

(With inputs from agencies.)