Attorney General Ken Paxton has revealed that three major United States-based banks have withdrawn from the United Nations-led Net-Zero Banking Alliance.
Launched in April 2021, the group comprises banks “committed to aligning their lending, investment and capital markets activities with net-zero greenhouse gas emissions by 2050,” according to the alliance’s website.
The group’s first commitment statement provides more details, pledging to “transition all operational and attributable GHG emissions from our lending and investment portfolios to align with pathways to net-zero by mid-century, or sooner.”
In October 2023, Paxton opened a review of the statuses of Bank of America, JPMorgan, Morgan Stanley, Wells Fargo, and other financial institutions pursuant to Senate Bill 13, first passed by the Texas Legislature in 2021.
The law prohibits governmental entities from entering into contracts with companies that boycott oil and gas companies. The financial institutions’ membership in the NZBA raised questions about their compliance with this law.
His review specifically focused on companies required to provide letters detailing their compliance with SB 13. Those already known to be a part of NZBA—like Bank of America, JPMorgan, Morgan Stanley, and Wells Fargo—are listed in the letter.
Other financial institutions listed are Barclays, DNT Asset Trust, Fidelity Investments, RBC Capital Markets, the Royal Bank of Canada, State Street, and TD Bank.
“Any company submitting a standing letter to us in the future must inform us if it or any affiliate is a Net Zero Alliance Member. To the extent we learn that a company with a current standing letter, or its affiliate, is a Net Zero Alliance Member, the company will be treated similarly to the companies identified on the attached list,” explained Paxton’s letter on the review process.
Wells Fargo announced it was leaving the alliance on December 20, followed shortly thereafter by Bank of America on December 31. Morgan Stanley left NZBA on January 2, and JPMorgan exited on January 7.
“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,” explained Paxton. “I am glad that Bank of America, Morgan Stanley, and JPMorgan have terminated their NZBA membership.”
In addition to the four banks pursued by Paxton, financial giant Citigroup left the alliance on December 31. Goldman Sachs left on December 10, kicking off the mass exodus.
An email by a Goldman Sachs spokesperson to ESGDive emphasized that the organization still has the “capabilities” to achieve its goals and “support the sustainability objectives” of its clients.
“Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world,” read the email.
Citigroup stated that it would refocus on the wider U.N. Glasgow Financial Alliance for Net Zero, of which the NZBA is the key initiative.
U.N. Special Envoy on Climate Ambition and Solutions Michael R. Bloomberg, the former Democrat presidential candidate and New York City mayor, is a co-chair of the organization.
“We will continue to work with our clients on their transitions to a low-carbon economy while helping ensure energy security, given the range of transition pathways that are being pursued across our global network,” read the press release.
NZBA has 141 members from 44 countries, including Banco Santander, Deutsche Bank, and HSBC. Only three U.S. banks remain in the alliance: Amalgamated Bank, Areti Bank, and Climate First Bank.
The wider U.N. GFANZ was founded after the 2021 United Nations Climate Change Conference as “an alliance of over 500 firms across 45 countries that control $130 trillion in assets” seeking to fight so-called “climate change.”
