By Tsvetana Paraskova - Jan 21, 2025,
Major US and Canadian banks have withdrawn from the Net-Zero Banking Alliance following pressure from Republican-led states and the election of President Trump.
BlackRock, the world's largest asset manager, has also left the Net Zero Asset Managers initiative due to legal concerns and confusion surrounding its practices.
European banks are reevaluating their participation in net-zero alliances, and the future of climate finance initiatives is uncertain.
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A few years ago, the world’s biggest banks and asset managers raced to commit to funding the energy transition and drop fossil fuel projects from portfolios as they came under shareholder and market pressure to join net-zero alliances.
But after years of scrutiny and blacklisting from Republican states in the U.S. and lawsuits from Republican attorney generals, North American banks and asset managers began quitting net-zero alliances en masse following President Donald Trump’s election victory.
Net Zero Exodus
The top U.S. banks and four of Canada’s largest banks are no longer part of the Net-Zero Banking Alliance (NZBA), a group of leading global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
Now several European banks are considering withdrawing from the NZBA, too, while the leading figures of the Glasgow Financial Alliance for Net Zero (GFANZ) – the umbrella group for the finance institutions that have pledged net zero goals – are struggling to hold their regular annual meeting this month, the Financial Times reports, citing sources with knowledge of the situation.
Some of Europe’s biggest banks are rethinking their membership and involvement in net-zero initiatives as Donald Trump returns to office and Republican-led U.S. states are going after “woke capital.” This, they say, discriminates against America’s oil, gas, and coal industry by committing to net-zero portfolios and adopting principles that could reduce financing for fossil fuel projects.
Since early December, the biggest U.S. banks – Goldman Sachs, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and JP Morgan – have all quit the NZBA.
Commenting on the banks’ withdrawals, Texas Attorney General Ken Paxton said,
“More and more financial institutions are taking a major step in the right direction by leaving the radical and anti-energy Net-Zero Banking Alliance.
“The NZBA seeks to undermine our vital oil and gas industries, and membership could potentially prevent banks from being able to enter into contracts with Texas governmental entities,” Paxton added.
BlackRock, the world’s largest asset manager, early this month quit the parallel Net Zero Asset Managers initiative in the latest exit of a major financial institution from a climate finance alliance since Trump was elected U.S. President.
BlackRock has decided to leave the voluntary Net Zero Asset Managers initiative, which launched in December 2020 and aims to “support the asset management industry to commit to a goal of net zero emissions in order to mitigate financial risk and to maximize long-term value of assets.”
The world’s top asset manager has quit the initiative because its membership has “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials,” Vice Chairman Philipp Hildebrand wrote in a letter to institutional clients.
Net Zero Under Scrutiny
BlackRock and major banks have come under increased pressure from Republican politicians and Republican-governed states over their pledges to scale back funding for fossil fuel projects.
Texas authorities, for example, have decided to withdraw $8.5 billion in assets of the Permanent School Fund from the asset manager. The Texas legislature passed a law in 2021 to penalize financial firms that, according to state authorities, discriminate against energy companies.
At the end of November, a group of Republican states led by Texas sued BlackRock and fellow asset managers Vanguard and State Street for alleged violation of antitrust laws. The states allege that the asset managers have been pressuring coal firms to lower output to cut emissions, thus driving up electricity prices in America.
Since leaving the net-zero asset managers’ alliance, BlackRock has reached a settlement with the state of Tennessee, which had sued the world’s biggest asset manager for misleading consumers regarding the role of Environmental, Social, and Governance (ESG) factors in its investment practices. The settlement concluded a lawsuit filed by the State of Tennessee under the Tennessee Consumer Protection Act (TCPA).
“The Americans are totally obsessed about not being sued by Texas. The banks have been the worst,” a European executive involved in the Glasgow initiative told FT.
Canadian banks BMO, National Bank, TD Bank Group, and CIBC also quit the net-zero banking alliance last week.
European lenders have threatened to follow suit unless NZBA eases rules and ends “all formal tracking and any issues that are perceived contrary to US antitrust”, according to FT’s sources.
The asset managers’ net zero alliance is already struggling under the pressure. A week ahead of President Trump’s inauguration, the Net Zero Asset Managers said it was launching a review of the initiative.
“Recent developments in the U.S. and different regulatory and client expectations in investors’ respective jurisdictions have led to NZAM launching a review of the initiative to ensure NZAM remains fit for purpose in the new global context,” the alliance said.
While the review is ongoing, the initiative is suspending activities to track signatory implementation and reporting.
European banks want the net-zero banking alliance to undergo a similar overhaul. Otherwise, they have threatened to quit and follow in the footsteps of the biggest U.S. and Canadian banks.
“Several banks have said that unless the banking alliance goes the same way [as] the asset management initiative, they will begin the process to leave,” a source familiar with the banks’ thinking told FT.
By Tsvetana Paraskova for Oilprice.com
Major US and Canadian banks have withdrawn from the Net-Zero Banking Alliance following pressure from Republican-led states and the election of President Trump.
BlackRock, the world's largest asset manager, has also left the Net Zero Asset Managers initiative due to legal concerns and confusion surrounding its practices.
European banks are reevaluating their participation in net-zero alliances, and the future of climate finance initiatives is uncertain.
A few years ago, the world’s biggest banks and asset managers raced to commit to funding the energy transition and drop fossil fuel projects from portfolios as they came under shareholder and market pressure to join net-zero alliances.
But after years of scrutiny and blacklisting from Republican states in the U.S. and lawsuits from Republican attorney generals, North American banks and asset managers began quitting net-zero alliances en masse following President Donald Trump’s election victory.
Net Zero Exodus
The top U.S. banks and four of Canada’s largest banks are no longer part of the Net-Zero Banking Alliance (NZBA), a group of leading global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
Now several European banks are considering withdrawing from the NZBA, too, while the leading figures of the Glasgow Financial Alliance for Net Zero (GFANZ) – the umbrella group for the finance institutions that have pledged net zero goals – are struggling to hold their regular annual meeting this month, the Financial Times reports, citing sources with knowledge of the situation.
Some of Europe’s biggest banks are rethinking their membership and involvement in net-zero initiatives as Donald Trump returns to office and Republican-led U.S. states are going after “woke capital.” This, they say, discriminates against America’s oil, gas, and coal industry by committing to net-zero portfolios and adopting principles that could reduce financing for fossil fuel projects.
Since early December, the biggest U.S. banks – Goldman Sachs, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and JP Morgan – have all quit the NZBA.
Commenting on the banks’ withdrawals, Texas Attorney General Ken Paxton said,
“More and more financial institutions are taking a major step in the right direction by leaving the radical and anti-energy Net-Zero Banking Alliance.
“The NZBA seeks to undermine our vital oil and gas industries, and membership could potentially prevent banks from being able to enter into contracts with Texas governmental entities,” Paxton added.
BlackRock, the world’s largest asset manager, early this month quit the parallel Net Zero Asset Managers initiative in the latest exit of a major financial institution from a climate finance alliance since Trump was elected U.S. President.
BlackRock has decided to leave the voluntary Net Zero Asset Managers initiative, which launched in December 2020 and aims to “support the asset management industry to commit to a goal of net zero emissions in order to mitigate financial risk and to maximize long-term value of assets.”
The world’s top asset manager has quit the initiative because its membership has “caused confusion regarding BlackRock’s practices and subjected us to legal inquiries from various public officials,” Vice Chairman Philipp Hildebrand wrote in a letter to institutional clients.
Net Zero Under Scrutiny
BlackRock and major banks have come under increased pressure from Republican politicians and Republican-governed states over their pledges to scale back funding for fossil fuel projects.
Texas authorities, for example, have decided to withdraw $8.5 billion in assets of the Permanent School Fund from the asset manager. The Texas legislature passed a law in 2021 to penalize financial firms that, according to state authorities, discriminate against energy companies.
At the end of November, a group of Republican states led by Texas sued BlackRock and fellow asset managers Vanguard and State Street for alleged violation of antitrust laws. The states allege that the asset managers have been pressuring coal firms to lower output to cut emissions, thus driving up electricity prices in America.
Since leaving the net-zero asset managers’ alliance, BlackRock has reached a settlement with the state of Tennessee, which had sued the world’s biggest asset manager for misleading consumers regarding the role of Environmental, Social, and Governance (ESG) factors in its investment practices. The settlement concluded a lawsuit filed by the State of Tennessee under the Tennessee Consumer Protection Act (TCPA).
“The Americans are totally obsessed about not being sued by Texas. The banks have been the worst,” a European executive involved in the Glasgow initiative told FT.
Canadian banks BMO, National Bank, TD Bank Group, and CIBC also quit the net-zero banking alliance last week.
European lenders have threatened to follow suit unless NZBA eases rules and ends “all formal tracking and any issues that are perceived contrary to US antitrust”, according to FT’s sources.
The asset managers’ net zero alliance is already struggling under the pressure. A week ahead of President Trump’s inauguration, the Net Zero Asset Managers said it was launching a review of the initiative.
“Recent developments in the U.S. and different regulatory and client expectations in investors’ respective jurisdictions have led to NZAM launching a review of the initiative to ensure NZAM remains fit for purpose in the new global context,” the alliance said.
While the review is ongoing, the initiative is suspending activities to track signatory implementation and reporting.
European banks want the net-zero banking alliance to undergo a similar overhaul. Otherwise, they have threatened to quit and follow in the footsteps of the biggest U.S. and Canadian banks.
“Several banks have said that unless the banking alliance goes the same way [as] the asset management initiative, they will begin the process to leave,” a source familiar with the banks’ thinking told FT.
By Tsvetana Paraskova for Oilprice.com
Scotiabank Joins Wall Street-Led Exit of Bankers’ Climate Club
By Alastair Marsh and Christine Dobby,
By Alastair Marsh and Christine Dobby,
Bloomberg News
January 20, 2025
CIO of Purpose Investments Greg Taylor explains why he's not concerned over Scotiabank's Q4 misses as he says their earnings were in-line with its trajectory.
(Bloomberg) -- Bank of Nova Scotia is the latest major bank to walk away from the industry’s biggest climate-finance alliance, following a mass exodus led by Wall Street.
The lender confirmed Monday it left the Net-Zero Banking Alliance, news that comes after Toronto-Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada all said Friday they were leaving the NZBA.
Scotiabank and other lenders that quit the group all said the decision won’t affect their commitment to decarbonizing their business.
In Scotiabank’s case, the firm “will continue to finance the transition and support our clients in implementing their sustainability strategies — this is the most important role that we can play,” spokesperson Katie Raskina said by email, adding that the bank “will continue to report on our progress, while meeting the varied and growing requirements of regulators across the globe.”
Royal Bank of Canada is the only large Canadian bank remaining in the alliance, but the country’s biggest lender has suggested it’s reconsidering that membership. Dave McKay, RBC’s chief executive officer, said in early January that pulling out of the NZBA “doesn’t lead to a non-commitment to net zero or climate change.”
A representative for RBC did not immediately respond to a request for comment Monday on the status of its membership in the group.
Canadian banks were some of the biggest financiers to oil, gas and coal companies in 2024, with Toronto-Dominion, RBC, BMO and CIBC ranking among the top 10 for such deals, according to data compiled by Bloomberg. The biggest provider of fossil-fuel finance last year was JPMorgan Chase & Co.
Since the beginning of December, the NZBA has been abandoned by Goldman Sachs Group Inc., Morgan Stanley, Wells Fargo & Co., Bank of America Corp., Citigroup Inc. and JPMorgan. The moves come as US President Donald Trump makes clear he’ll seek to roll back Biden-era climate policies and instead promote a revival of fossil-fuel production. Trump’s return has also emboldened the Republican Party in its ongoing attacks on climate finance, as states double down on bans and lawsuits.
Other climate alliances have lost high-profile members. Just over a week into the new year, BlackRock Inc. said it was ending its membership in the Net Zero Asset Managers initiative. The firm, which was among the asset managers singled out in a lawsuit led by Texas alleging antitrust breaches due to the adoption of pro-climate strategies that suppress coal production, said staying in NZAM had exposed it to “legal inquiries.”
In 2023, a net-zero group for insurers saw a mass walkout amid Republican litigation threats. A similar group for investors, Climate Action 100+, was hit by high-profile defections last year by the asset-management arms of Goldman, JPMorgan and Pacific Investment Management Co.
©2025 Bloomberg L.P.
CIO of Purpose Investments Greg Taylor explains why he's not concerned over Scotiabank's Q4 misses as he says their earnings were in-line with its trajectory.
(Bloomberg) -- Bank of Nova Scotia is the latest major bank to walk away from the industry’s biggest climate-finance alliance, following a mass exodus led by Wall Street.
The lender confirmed Monday it left the Net-Zero Banking Alliance, news that comes after Toronto-Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada all said Friday they were leaving the NZBA.
Scotiabank and other lenders that quit the group all said the decision won’t affect their commitment to decarbonizing their business.
In Scotiabank’s case, the firm “will continue to finance the transition and support our clients in implementing their sustainability strategies — this is the most important role that we can play,” spokesperson Katie Raskina said by email, adding that the bank “will continue to report on our progress, while meeting the varied and growing requirements of regulators across the globe.”
Royal Bank of Canada is the only large Canadian bank remaining in the alliance, but the country’s biggest lender has suggested it’s reconsidering that membership. Dave McKay, RBC’s chief executive officer, said in early January that pulling out of the NZBA “doesn’t lead to a non-commitment to net zero or climate change.”
A representative for RBC did not immediately respond to a request for comment Monday on the status of its membership in the group.
Canadian banks were some of the biggest financiers to oil, gas and coal companies in 2024, with Toronto-Dominion, RBC, BMO and CIBC ranking among the top 10 for such deals, according to data compiled by Bloomberg. The biggest provider of fossil-fuel finance last year was JPMorgan Chase & Co.
Since the beginning of December, the NZBA has been abandoned by Goldman Sachs Group Inc., Morgan Stanley, Wells Fargo & Co., Bank of America Corp., Citigroup Inc. and JPMorgan. The moves come as US President Donald Trump makes clear he’ll seek to roll back Biden-era climate policies and instead promote a revival of fossil-fuel production. Trump’s return has also emboldened the Republican Party in its ongoing attacks on climate finance, as states double down on bans and lawsuits.
Other climate alliances have lost high-profile members. Just over a week into the new year, BlackRock Inc. said it was ending its membership in the Net Zero Asset Managers initiative. The firm, which was among the asset managers singled out in a lawsuit led by Texas alleging antitrust breaches due to the adoption of pro-climate strategies that suppress coal production, said staying in NZAM had exposed it to “legal inquiries.”
In 2023, a net-zero group for insurers saw a mass walkout amid Republican litigation threats. A similar group for investors, Climate Action 100+, was hit by high-profile defections last year by the asset-management arms of Goldman, JPMorgan and Pacific Investment Management Co.
©2025 Bloomberg L.P.
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