JPMorgan Chase & Co. (JPM) announced its withdrawal from the Net Zero Banking Alliance (NZBA) on Tuesday, joining a growing list of Wall Street banks departing the climate-focused group. This move solidifies a significant shift in the financial sector’s engagement with climate alliances.
JPMorgan Chase, the largest lender in the United States, stated its commitment to pursuing “pragmatic solutions” that advance low-carbon technologies and energy security independently. The bank emphasized its dedication to serving the interests of its firm, shareholders, and clients.
This decision follows similar exits by prominent financial institutions, including Morgan Stanley (MS), Citigroup (C), Bank of America (BAC), Wells Fargo (WFC), and Goldman Sachs (GS). These departures mark a notable trend among major US banks.
The NZBA, established in 2021 under the Glasgow Financial Alliance for Net Zero (GFANZ), initially attracted numerous banks eager to showcase their commitment to net-zero emissions targets. Membership was widely publicized as a demonstration of the financial sector’s alignment with global climate goals.
However, these affiliations have recently faced increasing political scrutiny, particularly with the anticipated shift in Washington’s political landscape. The House Judiciary Committee, chaired by Republican Jim Jordan, has criticized such alliances, labeling them a “climate cartel.”
JPMorgan Chase’s withdrawal also extends to another climate initiative, Climate Action 100+, which aims to reduce global greenhouse gas emissions. Other institutions like State Street (STT) and Pimco have also left this coalition, while BlackRock (BLK) transferred its membership to its international arm. Representative Jordan lauded these withdrawals as victories for economic freedom.
Despite these departures, banks maintain involvement in other climate-related initiatives. Citigroup remains a member of GFANZ, the broader umbrella organization encompassing NZBA and other coalitions. Citigroup CEO Jane Fraser, Bank of America CEO Brian Moynihan, and BlackRock CEO Larry Fink were among the founding members of GFANZ.
GFANZ recently announced structural changes, easing participation requirements. Meanwhile, JPMorgan Chase confirmed that its asset management division will continue its participation in the Net Zero Asset Managers Initiative (NZAMI). The bank reiterated its commitment to supporting clients involved in the energy transition and decarbonization efforts.
Several banks have emphasized that leaving these alliances does not signify a retreat from their climate objectives. Morgan Stanley reaffirmed its unwavering dedication to net-zero goals, albeit with less stringent emission reduction targets compared to the Paris Agreement. Citigroup echoed this sentiment, emphasizing its ongoing commitment to achieving net zero and maintaining transparency regarding its progress. JPMorgan Chase itself confirmed its commitment to supporting clients in the energy transition.
