America’s six largest banks have exited a U.N.-backed climate initiative, drawing criticism from environmental groups that say voluntary commitments aren’t enough to curb fossil fuel financing.
Joseph Winters reports for Grist.
In short:
- Bank of America, Citigroup, Goldman Sachs, JP Morgan, Morgan Stanley, and Wells Fargo left the Net Zero Banking Alliance after facing pressure from conservative lawmakers.
- The alliance, which remains voluntary and lacks enforcement power, asks banks to cut greenhouse gas emissions across their investments but has been criticized for its leniency on fossil fuel financing.
- Environmental advocates argue that without government action, banks will continue to fund oil and gas projects despite their climate pledges.
Key quote:
"It is quite clear that major U.S. banks will not police themselves."
— Allison Fajans-Turner, Rainforest Action Network
Why this matters:
Banks play a crucial role in financing fossil fuel expansion, which drives climate change. While voluntary climate pledges signal intent, they lack enforcement, allowing financial institutions to continue funding projects that contribute to global warming. The departures from the Net Zero Banking Alliance highlight the limitations of self-regulation, particularly as governments hesitate to impose stricter financial oversight. Without stronger policies, many banks are likely to prioritize short-term profits and political favor over long-term climate stability.
Related: Big banks and asset managers pull out of climate groups amid political shifts
