7 January, 2025 – All six of the largest US banks have now withdrawn from the UN-Convened Net-Zero Banking Alliance (NZBA), abandoning their climate commitments apparently in fear of criticism from the incoming Trump administration. Reclaim Finance calls on the 141 banks remaining in the NZBA, particularly its many European members, to resist using the Wall Street banks’ preemptive obedience to Trump as an excuse to dilute their own climate commitments.
JPMorgan Chase (1) today announced it was also quitting the climate-action alliance following the departure of Morgan Stanley (2), Citi, Bank of America (3), Wells Fargo and Goldman Sachs (4) in the last month. The news comes just weeks before President Trump’s inauguration on 20 January.
While none of the banks have given clear reasons for the exodus, US financial institutions have faced threats from right-wing politicians and pundits over the past couple of years for their membership of net zero alliances. In September 2022, the banks reportedly threatened to leave the NZBA and the associated Glasgow Financial Alliance for Net Zero (GFANZ) due to concerns over potential anti-trust legal action from US red-state attorneys general. (4)
NZBA and GFANZ responded by issuing heavily lawyered disclaimers and by dropping any language in their guidelines and recommendations that could look like requirements to take action on fossil fuels. None of the US banks made good on their threats to quit in 2022.
The sudden exodus of these big US banks is a lily-livered effort to avoid criticism from Trump and his climate denialist cronies. European and other banks must not use the exit of the US banks as an excuse to weaken their own climate commitments. On the contrary, they have a unique opportunity to encourage the NZBA to strengthen its recommendations, by adopting meaningful positions against the expansion of fossil fuel.
Paddy McCully, Senior Analyst, Reclaim Finance
There are still 141 banks remaining in the NZBA, including all of the largest European banks. (5) Back when the US banks were first threatening to quit the NZBA, some European lenders privately bemoaned that they would like the NZBA guidelines to be stronger, but the US members were blocking all meaningful progress.
By strengthening their commitments, NZBA banks can demonstrate that they have not simply used U.S. obstructionism as an excuse to maintain the NZBA’s weak position. Other major fossil fuel financiers, such as the Canadians and the Japanese, must also not replace the U.S. as obstacles to stronger action within the NZBA.
Paddy McCully, Senior Analyst, Reclaim Finance
At least partly because of the US banks, the NZBA does not require its members to restrict their finance for fossil fuels. But the NZBA is not the be-all and end-all of banks’ climate action, and many banks have already adopted measures on fossil fuels outside the NZBA framework.
Several European banks took steps in 2024 against the expansion of oil and gas, with ING committing to no longer finance new LNG export terminals and BNP Paribas and Crédit Agricole halting the structuring of bonds for oil and gas producers. (6) Climate change does not take a break with the rise of parties hostile to a climate agenda, and banks must uphold their climate commitments by limiting both their risks and their impacts on the climate
