JPMorgan Chase adds to US defection from Net-Zero Banking Alliance

JPMorgan Chase adds to US defection from Net-Zero Banking Alliance
Six US banks have exited the UN-convened Net-Zero Banking Alliance since December, ahead of President-elect Donald Trump regaining office.
JAN 07, 2025

Less than two weeks before former President Donald Trump retakes office, JPMorgan Chase exited the Net-Zero Banking Alliance, leaving only three US banks as members of the climate group.

JPMorgan’s defection came on the heels of similar moves last week by three major firms: Morgan Stanley, Citigroup, and Bank of America. And those departures from NZBA followed ongoing pressure from Republican leaders that have targeted financial services companies for alleged roles in boycotting the fossil fuels industry.

It was only several years ago that the United Nations established the Glasgow Financial Alliance for Net Zero, or GFANZ, the organization that prompted the creation of NZBA. The banking alliance quickly attracted members, as enthusiasm for sustainable investing and decarbonization were at a high point across the world. More recently, a broad anti-ESG push in the US has led banks and asset managers to back off from commitments and associations with climate groups.

JPMorgan Chase’s exit from NZBA marks the sixth such departure of a major US bank in recent weeks, with only three domestic banks remaining: Amalgamated Bank; Areti Bank; and Climate First Bank, according to the organization’s site. In December, Wells Fargo and Goldman Sachs stepped away from NZBA.

Such defections have happened as Republicans in Congress have subpoenaed firms having associations with climate-pact groups and as some states have blacklisted financial institutions or brought lawsuits against them over the alleged boycotts.

“This is evidence that the long crusade against ESG and corporate responsibility writ large is having an impact – but I also think it’s certainly compounded and intensified because of the teeth [firms] see in the Trump administration having in making their lives miserable,” said Vanessa Fajans-Turner, executive director of Environmental Advocates NY.

“The Republicans are using tools or weaponizing subpoenas and other forms of political tactics to raise the stakes for banks that are taking action on climate.”

It is common for public companies, especially those in the financial services business, to consider climate change as a financial risk factor, though some have toned down their communications about that. Many mutual fund sponsors, for example, have changed the names of products or recharacterized investment strategies to deemphasize environmental, social, and governance factors amid the pushback – but that has also coincided with anti-greenwashing efforts by the Securities and Exchange Commission.

In some cases that has led to “green hushing,” with financial services companies perhaps still considering environmental risk factors behind the scenes. But because so many US banks have left the alliance, it could be difficult to know what impact those considerations may be having, due to the voluntary nature of disclosure, Fajans-Turner said.

“Industries now know what they need to do to improve,” she said. “Bank CEOs consistently have told me and have stated publicly that regulation is necessary to level the playing field for them in asking [for] robust climate smart policies. Now is the moment to do that, but the federal government is going the opposite direction.”

It is incumbent on states, especially New York, to enact policies in that area, she said.

Last year, a report funded in part by the Sierra Club found that the leading financers of the fossil fuel industry since 2016 have been JPMorgan Chase, Citigroup, and Bank of America.

Despite the departure from NZBA, J.P. Morgan Asset Management “continues to be a member of the Net Zero Asset Managers initiative,” a company spokesperson said in an email.

That group, also a GFANZ initiative, has seen US firms leave amid the same political pressures. However, their wider membership levels on an international basis have been much less affected so far. The Net Zero Asset Managers initiative, for example, includes 325 asset managers, representing about $57.5 trillion, that have made net-zero commitments for 2050 or earlier, according to the group’s site.

NZBA, which declined to comment on the recent departures, includes 141 banks across 44 countries, representing $61 trillion in assets.

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