Something has broken in the climate consciousness of the big Wall Street banks just as Donald Trump and his MAGA movement (Make America Great Again), reluctant to make any commitment to reduce carbon emissions, have returned to power. This week, JP Morgan Chase has become the latest of the US banking giants to leave the sector’s largest alliance on climate finance. The first American bank by assets announced on Tuesday that it will no longer be a member of the well-known Zero Net Emissions Banking Alliance (NZBA by the acronym of Net-Zero Banking Alliance).
The idea behind the NZBA is that Any dollar mobilized by a bank could be used to finance the ecological transitionthus making the world greener, or it could finance industrial activity that ends up emitting more carbon, thus aggravating the climate crisis. The underlying commitment is to meet the goal of reaching zero net carbon emissions by 2050.
JPMorgan’s departure is the latest blow to the NZBA. In December alone, Citigroup, Bank of America, Goldman Sachs and Wells Fargo were separated from it. So far in January, Morgan Stanley has also said it is leaving the group. The departures have been concentrated in the United States, in a context of intensification of the Republican Party’s attacks on what it has wanted to characterize as “capitalism.” woke up” as Trump’s return dominates the stage.
JP Morgan has stated that the entity “will continue to work independently to promote the interests” of the bank, its shareholders and clients. The goal is to continue focusing on “pragmatic solutions that help advance low-carbon technologies, while promoting energy security,” they say in their statement.
The departures from the alliance are a reflection of the efforts of American banks to protect themselves from the intensifying political pressure as Trump begins to push his agenda. Furthermore, they come after some skepticism with the success of the initiative, as, according to data compiled by Bloomberg, banks have collectively increased their financing of the fossil fuel industry since the alliance was formed in 2021. Now only three US lenders left in NZBA -Amalgamated Bank, Areti Bank and Climate First Bank-, compared to about 80 banks in Europe, according to the alliance’s website.
The defections that have hit the NZBA come on top of departures from similar alliances in other sectors of the financial industry. In 2023, a similar group among insurers suffered a mass exodus amid threats of litigation from the Republican Party. And in 2022, Vanguard Group, the world’s second-largest money manager, split from a climate group for asset managers.
The fraying of global climate alliances has led those responsible to regroup. The Glasgow Financial Alliance for Net Zero, which had served as an umbrella organization for the financial sector’s net zero groups, ended 2024 saying it was distancing itself from those units. Going forward, GFANZ will make its guidance available to financial firms whether or not they have committed to a net zero partnership, according to its latest update.
In its statement on Tuesday, JPMorgan said it plans to “continue to collaborate with GFANZ. And, like other banks that have left the NZBA, the entity committed to continue supporting the banking and investment needs of clients committed to the transition.” energy and with the decarbonization of the different sectors of the economy.
In 2024, JP Morgan was the top-ranked bank in oil, gas and coal trading, as well as being among the top five providers of green bonds and loans, according to data compiled by Bloomberg. In his climate report, published shortly after the US elections, the famous CEO, Jamie Dimonstated that JP Morgan seeks to “enable inclusive and sustainable economic growth because it is good for business.” But as the world tries to avoid the worst impacts of climate change, “we also you need affordable, secure energy to thrive“Scaling up zero-carbon energy is a critical path forward, but it will take time,” Dimon said.
The pressure from Texas
The aforementioned political background has been shown in its splendor also this week, when it has emerged that the attorney general of texasKen Paxton, has withdrawn his threat to exclude these large US banks from municipal bond deals since they have abandoned the controversial NZBA.
In 2023, his office announced that it was reviewing the policies of financial companies that were members of this climate alliance, which it has repeatedly criticized. This arose from Texas legislation that sought punish companies financial for participating in what he considered a “boycott” the oil and gas industries.
Paxton’s office said late Tuesday that its reviews of Wells Fargo, Bank of America, Morgan Stanley and JP Morgan will be closed. These companies are the main subscribers of State and local debt in Texasone of the largest markets for municipal deals. The Texas attorney general’s office approves most public bond offerings before they can close, giving Paxton influence over which banks can participate in such transactions.
However, prosecutors said in a separate statement that Bank of America and JP Morgan remain under review for their anti-trust policies. firearms. Another GOP law restricts the government from working with companies that “discriminate” against entities that work with firearms.
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