Three major banks also announced they would withdraw from the United Nations-backed Net Zero Banking Alliance (NZBA). Morgan Stanley, Bank of America and Citigroup announced this week that they are leaving a coalition of banks focused on climate change, following pressure from states and Republicans in Congress.
NZBA commits member banks to agree to promptly divest from fossil fuel interests in lending and set measurable targets to reduce greenhouse gas emissions to 'net zero' by 2050 I am asking you to sign a document. All NZBA member banks must submit. Annual report on progress towards 'net zero' targets.
big banks jump ship
The three financial institutions join Goldman Sachs and Wells Fargo in a rapidly expanding list of high-profile people leaving the NZBA in the past few weeks. All five banks, along with JPMorgan, have been targeted by U.S. Republican lawmakers for their hostility toward fossil fuel interests and the agricultural sector.
Morgan Stanley insists its net zero target remains in place despite leaving the NZBA. “Morgan Stanley's commitment to net zero remains unchanged,” Morgan Stanley said in a statement. “We aim to contribute to the decarbonization of the real economy by providing our clients with the advice and capital they need to transform their business models and reduce their carbon intensity.”
Climate change enthusiasts believe state actors need to act to stop banks from draining burdensome environmental, social and corporate governance (ESG) systems. In other words, the government needs to let the banks have the ball.
“These departures reveal the inadequacy of voluntary efforts and highlight the urgent need for state-level leadership and regulation,” said Vanessa Fajance Turner of New York State Environmental Advocates. ” he said.
state lawsuit
In the United States, ESG investing and attacks on fossil fuels face a multi-pronged battle.
In November, 11 Republican-led states (Texas, Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming) signed BlackRock Inc., Vanguard Group Inc., and State Street Corp. filed a lawsuit against. Alleges violation of antitrust laws.
According to the complaint:
Defendants used their stock ownership and voting rights to promote plans for production cuts, artificially limiting the supply of coal, significantly reducing competition in the coal market, and lowering energy prices for U.S. consumers. , resulting in cartel-level profits for the defendant.
collusion
Republican lawmakers have advanced the idea that ESG financing schemes violate antitrust laws by collusion. In September 2022, Federal Trade Commission Chair Lina Khan said the same thing. “Generally speaking, collusion is illegal… We have seen companies come to us and try to apply for ESG exemptions, and we have told them that such things do not exist. We had to clearly explain that we would not… Certainly, these types of cooperation and agreements are always important to us insofar as they can have an impact on competition,” she said.
In Congress, the House Judiciary Committee released a report calling aspects of ESG the “climate cartel.”
“The Biden-Harris administration has emboldened the climate cartel to call on investors. In early 2021, the climate cartel is looking to capitalize on the momentum created by the[Biden-Harris administration's]climate policies,” the report said. The book says: “In particular, John Kerry, the special presidential envoy for climate change in the Biden-Harris administration, 'helped' recruit investors for Ceres, an activist nonprofit and key member of the climate cartel.”
The NZBA was born out of the Glasgow Fiscal Allowance for Net Zero, which emerged from the dust of COP26 in Scotland. These shady backroom climate deals are now facing dire consequences in the light of day as these high-profile financial institutions continue to defect.
