by Kevin Killough
The new year is starting off with more bad news for environment, social and governance (ESG) investing.
Citigroup and Bank of America announced Tuesday that they were leaving the Net-Zero Banking Alliance, Reuters reported.
Then on Thursday, Morgan Stanley announced, it, too was terminating its membership with the group, according to Bloomberg.
Morgan Stanley and Citigroup each said they remain committed to progress in achieving net-zero emissions. Last month, Wells Fargo and Goldman Sachs withdrew from the alliance.
The exodus comes two years after 19 state attorneys general, lead by Texas Attorney General Ken Paxton, launched an investigation into these firms, for alleged deceptive trade practices connected to ESG. It was the third such investigation Paxton initiated, The Center Square reported.
The NZBA, according to its website, is a bank-led and United Nations-convened organization coordinating their lending, investment and capital markets activities to be in line with net-zero emissions by 2050.
In an October press release, the group touted its membership at 144 banks.
The group added that “a further twenty-three of them are expected to set targets and publish their individual transition plans by the end of 2025. After members voted to reinforce and update the NZBA target setting guidelines earlier this year, NZBA banks with significant capital markets activities are due to update their targets to include emissions associated with this part of their businesses by November 2025.”
However, the exits from the NZBA to not necessarily signal the finance giants are dropping the “net zero” dreams.
EGSToday noted, “The NZBA forms part of the Glasgow Financial Alliance for Net Zero (GFANZ), a UN-backed umbrella group of net zero-focused financial sector coalitions, which also includes the Net Zero Asset Managers initiative (NZAM), Net Zero Asset Owner Alliance (NZAOA), Net Zero Financial Service Providers Alliance (NZFSPA), the Net Zero Investment Consultants Initiative (NZICI), the Paris Aligned Asset Owners (PAAO), the Venture Climate Alliance (VCA), and the Net-Zero Export Credit Agencies Alliance (NZECA).
The ESG news outlet recalled that another group in the larger GFANZ alliance – co-chaired by Michael Bloomberg and Mark Carney – disbanded altogether following the exit of several members.
“The Glasgow Financial Alliance for Net Zero (GFANZ) going forward will allow any financial institution working to mobilize capital and lower the barriers to financing energy transition to participate,” the group said in a year-end statement. “To date, GFANZ has successfully worked to support greater levels of climate-related disclosure, the development and publication of climate transition plans, and the launch of initiatives to de-risk private investment going into emerging markets and developing economies. Without private finance, there can be no global energy transition. For that reason, in 2025 and beyond, GFANZ will redouble its efforts to mobilize private capital.”
– – –
Kevin Killough is a reporter at Just the News.
Photo “Bank of America” by Tony Webster CC2.0.
