the staff of the Ridgewood blog
Ridgewood NJ, The Net Zero Banking Alliance (NZBA) was established to bring banks together in a collective commitment to align their financial activities with achieving net zero greenhouse gas emissions by 2050. Despite its ambitious goals and the backing of global financial institutions, the alliance is now facing a significant challenge: a mass departure of major American banks.
Who’s Leaving the NZBA?
In recent weeks, leading U.S. financial institutions, including CitiGroup, Goldman Sachs, Wells Fargo, Bank of America, and Morgan Stanley, have exited the alliance. These departures leave JP Morgan Chase as the sole large American bank still committed to the NZBA.
Why Are Banks Leaving?
While none of these banks have provided specific reasons for their withdrawal, the timing is notable. The exits coincide with the period between Donald Trump’s election and inauguration as President. Trump has been vocal about his support for oil and gas investments and has previously referred to climate change as a “hoax.” His administration’s anticipated policies may shift the U.S. away from global climate commitments, raising questions about the future of sustainability efforts led by the financial sector.
What Is the NZBA?
Convened by the United Nations, the NZBA brings together some of the world’s largest banks to:
- Align their lending, investment, and capital markets activities with net zero goals.
- Promote sustainable investing to combat climate change.
- Prioritize initiatives to reduce greenhouse gas emissions globally.
The alliance has been a cornerstone of “global financial sustainability efforts”, with members committing to align their portfolios with the Paris Agreement’s climate targets.
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