Three major US banks have departed the Net Zero Banking Alliance (NZBA), with Morgan Stanley joining co-founders Citi and Bank of America in deciding to quit the coalition. All three banks confirmed their intention to continue to work toward net zero goals. Morgan Stanley said it would “contribute to real-economy decarbonisation by providing our clients with the advice and capital required to transform business models and reduce carbon intensity”, adding that it would still report progress on 2030 emissions reduction targets. The statement follows earlier announcements by Citi and Bank of America. Wells Fargo and Goldman Sachs both confirmed their departures from the alliance in early December. The NZBA, formed in 2021 to provide guidance and support to banks in reducing portfolios emissions to net zero by 2050, is one of several sub-sector alliances operating under the umbrella of the UN-backed Glasgow Financial Alliance for Net Zero (GFANZ). The announcements from leading US banks follow legal proceedings against a number of finance sector firms on anti-trust grounds relating to climate-related investment decisions and products, as well as political pressures on other climate-focused finance sector initiatives, including the Net Zero Insurance Alliance and Climate Action 100+. NZBA, which has around 140 members across 44 countries, released a progress update in October, hailing “significant steps” toward climate goals, but other analyses have described actions by leading institutions, including US banks, as “insufficient”. GFANZ recently updated its terms to enable the participation of any finance sector firm supporting the energy transition, as part plans to “redouble its efforts” to mobilise private capital “in 2025 and beyond”. Both Citi and Bank of America will continue to be members of the GFANZ Principals Group.
