Wells Fargo ditches net zero targets vilified by Trump administration

Wells Fargo & Co. has formally abandoned its net zero commitment, walking away from an industrywide climate objective that has been attacked by the administration of US President Donald Trump.

“As of today, we are discontinuing our sector-specific 2030 interim financed emissions targets and our goal to achieve net zero by 2050 for financed emissions,” the bank said in a statement on Friday.

The announcement comes as some of the world’s biggest banks recalibrate their approach to climate finance in response to growing headwinds against the strategy. In the US, the Trump administration has launched a full-throated attack on net zero policies, leaving a whole array of Biden-era measures in shreds. Outside the US, banks are also adjusting. In the UK, for example, HSBC Holdings Plc says it’s time to stop restricting capital for fossil-fuel clients.

Wells Fargo’s announcement comes just months after it quit the world’s biggest climate coalition for banks — the Net-Zero Banking Alliance — together with the rest of its US peers. 

“When we set our financed emissions goal and targets, we said that achieving them was dependent on many factors outside our control,” Wells Fargo said in its statement on Friday. Those factors include public policy, consumer behavior and technology changes that it expected would help clients move to lower-emitting operating models, the bank said.

However, “many of the conditions necessary to facilitate our clients’ transitions have not occurred,” Wells Fargo said.

Since the Nov. 5 election returned Trump to the White House, US banks that just four years ago pledged to align their businesses with the net zero goals enshrined in the Paris climate accord have mounted a major retreat. Many point to the disconnect between pursing targets aligned with 1.5C of global warming, when the planet is on track for roughly 3C.

Climate finance is struggling to right itself from the combined headwinds of political backlash in the US, an energy crisis fueled by war, and higher interest rates that have proved particularly painful for green startups relying on big up-front investments. 

Wells Fargo said its decision to abandon its targets for financed emissions — a measure that refers to the carbon footprint of lending and bond underwriting — doesn’t affect its ambitions to continue investing in low-carbon activities.

“Wells Fargo has long been a leading bank in the energy sector, financing conventional and low-carbon energy solutions,” it said. And “Wells Fargo can play a role in supporting our clients’ climate-related efforts.”

The bank had set interim decarbonization targets to reduce the emissions from its lending in several sectors, including oil and gas, steel and aviation. Those targets were slated for achievement in 2030 and also included automotive manufacturing.

However, the bank also emphasized its contribution to financing energy clients more broadly. As of Dec. 31, Wells Fargo had about $55 billion of outstanding commitments to oil, gas, pipeline companies, and utilities, it said. It has also provided more than $20 billion of renewable tax equity since 2006, it added. 

Over the past three years, Wells Fargo has “deployed $178 billion of sustainable finance,” it said. That includes $16 billion in renewable energy and over $15 billion in clean transportation finance, the bank said.

“We are adjusting our approach to focus on doing what banks do best,” Wells Fargo said. And that is “providing financing and expertise to help clients pursue their own objectives.”

The bank will maintain its $500 billion 2030 sustainable finance goal, as well as its 2030 operational sustainability goals and its 2050 goal for Wells Fargo’s own operational emissions.

“We will continue to serve clients’ energy needs, meeting them where they are in their chosen energy and transition strategies,” it said. “And we will work to meet the rising energy demands of the clients, customers, and communities we serve.”