Paul Teller
Paul Teller is the Executive Vice President of Advancing American Freedom.
In clear preparation for President Trump’s second term, six of America’s largest banks – Citigroup, Bank of America, Goldman Sachs, JPMorgan, Morgan Stanley, and Wells Fargo – have made an exodus from the leading woke climate alliance.
The UN-sponsored Net Zero Banking Alliance (NZBA) requires leading global banks to put climate extremism over good business by aligning their investments, lending, and capital market activities with the goal of net-zero greenhouse gas emissions levels by 2050.
Disguising itself as a philanthropic endeavor essential for the “sustainable finance agenda,” the NZBA functions as an agent of the left’s radical climate agenda. It wrongfully prioritizes virtue-signaling climate boondoggles. Thankfully, data suggests that members have engaged primarily only in noisy financial virtue signaling. Altering investment strategy to advance climatism will hinder economic growth and destroy shareholder value.
These banks should be commended for waking up and walking away from this woke climate pact that does nothing for the environment or the American people. Their withdrawal is a win for the growing pendulum swing against the progressive takeover of American industry under the banner of environmental, social, and governance standards (ESGs).
In the name of “social justice” and “progress,” ESGs wreak havoc on the economy. ESG subsidizes unreliable energy leading to blackouts, raises costs on American families, and reduces good financial investments, while discouraging innovation in the name of climate alarmism and advancing “social justice.” These “standards” undermine America’s competitiveness on the world stage, leave us more vulnerable to China and make life more difficult for American families.
The recent whiplash against NZBA’s ESG agenda is having a resounding effect. BlackRock announced last week that it was pulling out of a similar UN-sponsored climate initiative: the Net Zero Asset Managers initiative. This decision comes in the wake of continued scrutiny around BlackRock’s history of aggressive ESG investment strategies.
The incoming Trump administration is likely to continue amplifying pressure on pro-ESG companies by countering woke ESG practices and supporting antitrust violation investigations of ESG zealots.
For the past two years, several Republican state attorneys general have threatened legal action and opened investigations into ESG-compliant companies. Agreements like the NZBA often require collaboration across different banks, which can limit competition and naturally raise antitrust concerns.
By committing to a net-zero action plan, banks are essentially promising to fully boycott the fossil fuel industry by 2050, which could compromise their duties to investors and customers. In Texas, Attorney General Ken Paxton conducted a 2023 review of major US banks under a Texas law prohibiting governmental entities from entering into business with companies boycotting the oil and gas industries. He closed the probe following the banks withdrawal from NZBA.
Still, the work has just begun. Undoing the damage will take time. The recent mass withdrawal from the NZBA is encouraging, but the gesture doesn’t necessarily signify total victory over ESG.
Although Bank of America withdrew from the NZBA, it remains publicly committed to the net zero platform and principles. Similarly, Citigroup said that it also remains “committed to reaching net-zero” and announced that while it was pulling out of the NZBA, it will still support the Glasgow Financial Alliance for Net Zero, NZBA’s parent alliance that Citigroup helped found.
To truly regain trust with American consumers, these banks must demonstrate a renewed commitment to their fiduciary duties to shareholders and depositors. Loans and investments should be made in pursuit of maximizing value rather than forging virtue-signaling global alliances with others’ resources.
Time will tell if these recent moves are simply media stunts to avoid the ire of the incoming President Trump or if a true realignment of principles and ethics is occurring in the financial sector. Either way, this news is a win for economic freedom and prosperity and is yet another step in neutralizing the political correctness and radical wokeism holding corporate America hostage.
This article originally appeared at Real Clear Energy and was republished by CFACT.
