Fact Check: Major US Banks Withdrew from Net Zero Banking Alliance Amid Climate Crisis
What We Know
Recent reports confirm that major US banks have indeed withdrawn from the Net Zero Banking Alliance (NZBA), a UN-sponsored initiative aimed at achieving net-zero greenhouse gas emissions by 2050. Notably, between December 2024 and January 2025, all six of the largest US banks—JP Morgan, Bank of America, Citigroup, Goldman Sachs, Morgan Stanley, and Wells Fargo—left the alliance (source-1, source-3). This shift has been interpreted as a response to increasing pressure from conservative lawmakers and a broader backlash against Environmental, Social, and Governance (ESG) criteria (source-1, source-7).
The NZBA was established in 2021 and had around 140 members at its peak. It required banks to set interim targets for emissions reduction and disclose their annual emissions. However, the alliance has faced criticism for its lack of enforcement mechanisms, relying heavily on voluntary compliance (source-3, source-7).
Analysis
The withdrawal of these banks from the NZBA is significant, as it reflects a broader trend of financial institutions retreating from climate commitments under political pressure. The banks cited concerns over legal inquiries and regulatory scrutiny as reasons for their exit (source-1). For instance, BlackRock's departure was attributed to legal inquiries from various public officials, indicating a fear of repercussions for their ESG commitments (source-1).
Critics argue that these withdrawals undermine the progress made towards climate goals. Environmental advocates have pointed out that voluntary initiatives like the NZBA have historically been insufficient for driving meaningful change in the banking sector (source-3). The lack of binding commitments allows banks to continue financing fossil fuel projects while appearing to support climate initiatives (source-1, source-7).
The sources used in this analysis are credible, with reports from established news outlets and academic institutions providing a well-rounded view of the situation. However, it is essential to recognize potential biases, particularly from sources that may have environmental advocacy agendas.
Conclusion
The claim that major US banks withdrew from the Net Zero Banking Alliance amid the climate crisis is True. The evidence shows that these banks' exits were influenced by political pressures and legal concerns, reflecting a significant setback for climate initiatives in the financial sector. The voluntary nature of the NZBA and the lack of enforcement mechanisms have made it easier for banks to disengage from their climate commitments without facing substantial consequences.
