JPMorgan Exits Net Zero Banking Alliance, Completing Wall Street Retreat

JPMorgan Chase announced Tuesday it is leaving the Net Zero Banking Alliance (NZBA), marking the final departure of a major U.S. bank from the key climate group. The move completes a Wall Street retreat from the alliance, which was formed in 2021 as part of the Glasgow Financial Alliance for Net Zero to align financial institutions with global climate goals.

The largest U.S. lender stated it would continue to work independently on climate initiatives, emphasizing its focus on “pragmatic solutions” to advance low-carbon technologies while ensuring energy security. A JPMorgan spokesperson said, “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.”

JPMorgan’s exit follows similar moves by Morgan Stanley, Citigroup, Bank of America, Wells Fargo, and Goldman Sachs in recent weeks. The NZBA, which once boasted over 100 member banks, has faced increasing scrutiny and political pressure, particularly from Republican lawmakers who have criticized environmental, social, and governance (ESG) initiatives as “woke” investing.

In December, the House Judiciary Committee, led by Ohio Republican Jim Jordan, accused financial environmental alliances of creating a “climate cartel.” Jordan praised the recent withdrawals from climate coalitions, calling them “big wins for freedom and the American economy.”

Despite the exits, some banks have emphasized that their climate commitments remain unchanged. Morgan Stanley stated, “Our commitment to net-zero remains unchanged,” while Citigroup reaffirmed its dedication to reaching net-zero emissions. Both banks, however, have set less ambitious targets than those outlined in the Paris Agreement.

JPMorgan’s asset management division will remain part of the affiliated Net Zero Asset Managers Initiative (NZAMI), even as the parent company withdraws from the NZBA. The Glasgow Financial Alliance for Net Zero, the broader initiative housing NZBA, recently announced changes to loosen participation requirements, signaling a shift in its approach to climate commitments.

The retreat from climate alliances reflects growing political and economic pressures on Wall Street, as financial institutions navigate the complex landscape of ESG investing and regulatory scrutiny. While some banks continue to participate in broader climate initiatives, the exodus from the NZBA underscores the challenges of aligning financial goals with global climate targets.