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On Tuesday, Bank of America and Citigroup announced their decision to leave the world’s biggest climate alliance for banks, signaling a potential shift in corporate America’s stance on climate objectives, particularly during what could be Donald Trump’s second presidential term.
This month, BofA and Citi join the ranks of major US financial institutions like Goldman Sachs and Wells Fargo in stepping away from the Net-Zero Banking Alliance. Launched with Citi’s involvement in 2021 and backed by the UN, this initiative was praised as a significant move toward addressing global warming by curbing investments and loans to sectors contributing heavily to greenhouse gas emissions.
Despite withdrawing from the alliance, Citi emphasized its ongoing commitment to climate goals. It plans to redirect its focus towards funding emerging markets to back their climate-related endeavors. “We will continue collaborating with our clients on their journey to a low-carbon economy while also ensuring energy security,” the bank stated.
Similarly, BofA conveyed its determination to support clients in achieving their climate aspirations.
However, US banks and large corporations are increasingly feeling the heat from Republican lawmakers who advocate for distancing from commitments that might reduce loans to the oil and gas sector or other traditional energy industries. This pressure has intensified following Trump’s election victory.
In a related development, Republican-led states filed a federal antitrust lawsuit in November against BlackRock, State Street, and Vanguard. They accused these top three US index fund managers of leveraging their investment influence to limit supply chains to meet net-zero carbon emissions targets.
Additional contributions were made by Kenza Bryan in London and Patrick Temple-West in New York.
