Dive Brief:
- Bank of America, Citigroup and Morgan Stanley have departed the United Nations-backed Net-Zero Banking Alliance, the three financial institutions confirmed to ESG Dive this week.
- Citi and BofA on Tuesday announced their departure from the global climate coalition — whose members have committed to aligning their financial activities with the aim of reaching net-zero emissions by 2050 — with Morgan Stanley following suit on Thursday.
- The exits come a few weeks after Goldman Sachs announced its decision to quit NZBA and against a backdrop of climate-focused alliances facing increased scrutiny from the Republican party, which has initiated probes on ESG policies across multiple fronts.
Dive Insight:
A Citi spokesperson confirmed the bank’s exit to ESG Dive Friday, noting it remained committed to its own net-zero goals and would center its attention on “addressing barriers to mobilizing capital to emerging markets in support of the low-carbon transition.” Citi also said it would continue to support the Glasgow Financial Alliance for Net Zero — a UN-backed umbrella group of climate-focused financial sector coalitions, which includes NZBA — despite its departure from the coalition.
A BofA spokesperson said the financial institution would “continue to work with clients on this issue and meet their needs,” and would also maintain its involvement in GFANZ.
Morgan Stanley, like its banking peers, also did not provide an explicit reason for its departure, but said its “commitment to net-zero remains unchanged.”
“We aim to contribute to real-economy decarbonization by providing our clients with the advice and capital required to transform business models and reduce carbon intensity,” a spokesperson from the New York-based investment bank told ESG Dive Friday.
The three financial institutions are the latest U.S.-based firms to quit the climate-focused banking alliance, trailing after Goldman Sachs and Wells Fargo — both of whom quit NZBA in December.
“These exits reveal the inadequacy of voluntary commitments and underscore the urgent need for state-level leadership and regulation to protect state and national climate progress and economic stability,” said Vanessa Fajans-Turner, executive director of Environmental Advocates NY, in an emailed statement.
The Net-Zero Banking Alliance — whose members have committed to align their lending, investment and capital markets activities with global efforts to tackle climate change — has been the target of several GOP-led probes and investigations of late.
Last year, the Republican heads of agriculture from 12 states, including Alabama, Georgia, Florida and Texas, requested information from NZBA members on their plans to achieve net-zero status within their respective agricultural portfolios.
Prior to this, 14 Republican state attorneys general began an investigation into the Net-Zero Banking Alliance in the fall of 2022, probing climate pledges by those signatories on allegations the banks blocked credit to oil companies.
Both probes targeted Goldman Sachs, Bank of America, Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo and inquired about their participation in the NZBA.
