As the inauguration of Donald Trump, the US president-elect skeptical of the climate crisis, approaches, major Wall Street banks have been withdrawing from climate agreements one after another.
According to Bloomberg News and others on the 2nd (local time), Morgan Stanley, a major US investment bank, officially withdrew from the global financial institutions' climate agreement, the Net-Zero Banking Alliance (NZBA), on the same day. Morgan Stanley is the third Wall Street bank to leave the NZBA this week, following Citigroup and Bank of America (BoA). Goldman Sachs and Wells Fargo had already left the NZBA last month.
The NZBA is a global banking alliance established in 2021 under the leadership of the United Nations. The organization's main mission is to align banks' financial portfolios with the goals of the Paris Climate Agreement to achieve carbon neutrality by 2050. Currently, more than 140 banks worldwide are members.
The US banks that withdrew from the NZBA stated that this decision does not mean rejecting climate goals and that they will set their own carbon neutrality targets and faithfully implement them. Morgan Stanley explained, "Our commitment to achieving net zero carbon remains unchanged," and Citigroup also stated, "We are dedicated to achieving carbon neutrality and continue to maintain transparency about our progress."
However, the dominant assessment is that the decision was largely influenced by pressure from Trump, a climate crisis skeptic, and the Republican Party. Bloomberg explained, "This withdrawal occurred amid rising political tensions in the US," adding, "Large US financial institutions are becoming targets of the Republican Party, which has labeled carbon neutrality groups as climate cartels."
As Trump, who has announced his intention to withdraw from the Paris Climate Agreement, approaches inauguration, the Republican-controlled Congress is also showing teeth against organized climate activities. Last month, Republican Representative Jim Jordan, who leads the House Judiciary Committee, criticized financial institutions joining environmental groups like the NZBA as a "climate cartel," and 11 states including Texas filed antitrust lawsuits against the US 'Big 3' asset managers?BlackRock, Vanguard, and State Street?alleging they pressured coal companies through climate-friendly investment policies.
Yahoo Finance reported, "The Republican Party is set to take over Washington D.C. in 2025 and is focusing political attacks on so-called 'woke' activities," adding, "Another climate alliance formed to limit greenhouse gases globally, Climate Action 100+ (CA100+), has also lost members such as JP Morgan, BlackRock, and PIMCO."
As the Trump administration is expected to reject climate activities and push for a massive expansion of oil and gas development, there are signs in US politics that the outgoing Joe Biden administration is trying to put a wrench in these plans. Bloomberg reported that President Biden is preparing to issue an executive order before his departure (on the 20th) to permanently ban new oil and gas development in certain US offshore waters.
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