Carbon

US banks pull out of net zero organisation after possible breaches of “anti-trust” law

Beef Central 17/01/2025

SIX major banks from the United States have announced they are walking away from a global organisation aimed at aligning them on targets to reach net zero emissions by 2050.

JP Morgan was the latest to announce it is pulling out of the Net Zero Banking Alliance after similar announcements were made by Goldman Sachs, Wells Fargo, Citi, Bank of America and Morgan Stanley. Only three American banks remain part of the alliance – Amalgamated Bank, Areti Bank and Climate First Bank.

Convened by the United Nations, the NZBA was set up in 2021 to bring the banks together under the same framework and give guidance to their targets of reaching net zero by 2050.

Australia’s big four banks, along with the Bank of Queensland and Macquarie Bank are signatories of the NZBA.

Memberships with organisations like the NZBA are some of the main drivers of bank initiatives filtering out to cattle producers, such as the incentivised climate programs and carbon baselining.

The US banks have not given much reasoning for their departure from the NZBA, however, many suspect they are concerned about political backlash with incoming president Donald Trump loudly opposed to climate change-related policies.

Another potential factor for their exit has been concern that the joint effort could be breaching the US’s anti-trust laws.

In September last year, a letter signed by 20 state attorney generals was sent to the banks highlighting their concerns about an organisation called the Net Zero Financial Service Providers Alliance, which works in coordination with the NZBA.

“The substantial commitments you have made as NZFSPA signatories give us pause, as they do not appear consistent with our laws protecting consumers,” the letter said.

“Although many of you are direct competitors with one another, you have collectively agreed to coordinate the ‘alignment’ of your products and services under the guise of a shared ideological vision.

“By aligning your products and services with the Paris Agreement’s exacting specifications, you are necessarily taking actions to artificially restrict the supply of goods and services in the real economy. These restraints on trade may inhibit innovation, suppress output, and harm consumers.”

Net zero commitments remain intact

While the banks have now made public moves away from the NZBA, most of them appear to still be committed to “net zero” goals – according to their websites.

Similar moves have been made with other target setting alliances.

Last year, JBS made a public move away from an organisation called the Science Based Targets initiative, which performs a similar role to the NZBA for supply chain companies like McDonald’s, supermarkets and processors.

JBS has kept its net zero by 2040 goal in place but vowed to do it outside the SBTi. Microsoft and Walmart are have also had commitments removed from SBTi but kept the overall goal in place.

 

 

 

 

 

 

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Comments

  1. Peter Paradice, 17/01/2025

    Trump won and the woke, carpet bagging banks promoting the carbon ideology, driving ESG DEI crazy policies are starting to melt away.
    Whatever happened to the premise that carbon drives climate? Not so important now apparently. Lots of people looking for new jobs as the green dream fizzles down to a carbon cinder.
    Fight, Fight, Fight …. 4 years for a reset but not the one the WEF was dreaming of.

    • Buster, 18/01/2025

      It would be mighty foolish to conflate banks distaste for antitrust lawsuits with a total willingness to disregard climate science and climate risk.

      The GOP may not take climate science seriously but your bank sure does, even if it’s forced to do so while keeping a lower profile. All those sustainability teams at US banks are still going to be there in 4 years time because the boards of directors will still have a fiduciary duty to shareholders to manage risk.

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