Last week, three major financial institutions exited the Net-Zero Banking Alliance, an international banking climate alliance committed to aligning their activities with net-zero greenhouse gas emissions targets by 2050. The group was founded in 2021 by the United Nations and holds a total of $71 trillion in assets. It has more than 100 banks from forty-four countries as members.
The recently departed institutions, Morgan Stanley, Citigroup, and Bank of America, gave separate statements on the matter.
A Citi spokesperson stated that the bank would focus its attention on addressing limits to capital mobilization to emerging markets in support of the low-carbon transition and its own net-zero goals. The spokesperson added that the bank would also continue supporting the Glasgow Financial Alliance for Net Zero, a coalition of leading financial institutions committed to accelerating the net-zero transition.
A Bank of America spokesperson revealed that the institution would also maintain its involvement in the Glasgow Financial Alliance for Net Zero and continue working with clients to meet their needs.
Morgan Stanley emphasized that its commitment to net-zero remained unchanged, with its spokesperson adding that they remained focused on contributing to real-economy decarbonization by offering clients the capital and advice needed to decrease carbon intensity and transform business models.
This exit follows the departure of Wells Fargo and Goldman Sachs, who left the Net-Zero Banking Alliance in December.
In a statement, Executive Director Vanessa Fajans-Turner of Environmental Advocates NY argued that these departures exposed the shortcomings of voluntary pledges and emphasized the need for government-driven regulations and leadership to safeguard both state and national climate advancements as well as economic stability.
Over the last few years, the Net-Zero Banking Alliance has also been on the receiving end of several investigations and probes led by the GOP. In 2022, fourteen GOP state attorneys general launched an inquiry into the alliance, investigating climate pledges by parties involved on allegations the banks restricted financial support to oil firms.
In total, the attorneys made 11 requests for data on communications between members of the alliance, the reasons why each firm joined the alliance and details of any conversations around interim objectives.
Last year, GOP heads of agriculture from states like Texas, Florida and Georgia requested data from the alliance’s members regarding their strategies to achieve net-zero objectives within their agricultural investments.
These inquiries targeted the aforementioned firms as well as others like JPMorgan Chase and are expected to continue after Trump is sworn in.
It remains to be seen whether the uncertainty regarding the future of net-zero policies in the U.S. will affect businesses like Coyuchi Inc. that are implementing ESG principles.
NOTE TO INVESTORS: The latest news and updates relating to Coyuchi Inc. are available in the company’s newsroom at https://ibn.fm/COYU
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