Stockholm (NordSIP) – On January 7th, JP Morgan announced it was leaving the Net-Zero Banking Alliance (NZBA), the latest in a series of similar announcements. This announcement follows a similar decision by Morgan Stanley on January 2nd, an announcement which followed on the heels of the decision by Bank of America and Citigroup, on December 31st, by Wells Fargo on December 23rd and Goldman Sachs, on December 10th.
“We will continue to work independently to advance the interests of our Firm, our shareholders and our clients and remain focused on pragmatic solutions to help further low-carbon technologies while advancing energy security,” a JP Morgan spokesperson said in a statement, according to media reports. “We will also continue to support the banking and investment needs of our clients who are engaged in energy transition and in decarbonizing different sectors of the economy.”
“We aim to contribute to real-economy decarbonization by providing our clients with the advice and capital required to transform business models and reduce carbon intensity,” Morgan Stanley said on the occasion of its announcement, according to reports by news agency Reuters. The same source also noted that the bank “would also continue to report on its efforts toward previously set 2030 targets to reduce the emissions tied to its loan book.”
Preparing for the Trump Presidency
These announcements are part of US banks’ adjustment to the incoming Trump Administration and the accompanying Republican majority in Congress.
Even prior to the election US financial institutions had started to back under political pressure. In August, Republican Congressional leaders sent a letter to 130 members of Climate Action 100+ describing the organisation as a “woke ESG cartel” and causing several of its members to jump ship.
Then, at the end of November, the attorney generals from eleven states in the USA filed a lawsuit against BlackRock, Vanguard and State Street, accusing them of a number of market infractions, not least of which conspiracy to artificially inflate energy prices.
This is consistent with the second Trump Administration’s expressed wish to leave the Paris Agreement, again. The USA was one of the original signatories of the 2015 Paris Agreement, but then left during the first Trump Administration. Upon the election of President Biden, the USA rejoined the international framework. Now, the USA is likely to revert to its pre-2020 decision.
