Banks Retreat from Climate Pledge Amid Political Backlash
The financial sector’s commitment to combating climate change is facing a setback as two major US banks, Citigroup and Bank of America, announced their withdrawal from the Net-Zero Banking Alliance (NZBA). This move follows the recent exit of Wells Fargo and Goldman Sachs from the alliance.
A Shift in Priorities
The NZBA, a coalition of global banks, aims to reduce carbon emissions from lending and investment portfolios to zero by 2050. However, member banks have been scaling back their climate initiatives to avoid antagonizing Republican policymakers who oppose limiting fossil fuel financing.
Citi’s Progress and Departure
Citigroup cited progress toward its own net-zero goals as the reason for its departure from the NZBA. The bank’s decision suggests that it may be pursuing a more independent approach to reducing its carbon footprint.
BofA’s Commitment to Clients
Bank of America, in a statement, reaffirmed its commitment to working with clients on climate-related issues and meeting their needs. While the bank’s departure from the NZBA may raise questions about its dedication to climate action, its statement suggests that it will continue to engage with clients on this issue.
Political Pushback
The banking sector’s retreat from climate commitments comes amid growing political pressure. Last month, a lawsuit was filed by Texas and 10 other Republican-led states against BlackRock, Vanguard, and State Street, alleging that the asset managers violated antitrust law through climate activism.
A Challenging Landscape
As the financial sector navigates the complex landscape of climate action and political pushback, it remains to be seen how banks will balance their environmental responsibilities with the need to appease policymakers. One thing is clear: the road to net-zero emissions will be fraught with challenges.
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