The torching of Los Angeles has dealt a significant blow to Wall Street’s efforts to join forces with the incoming Trump administration on environmental issues. Six major US banks – JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs – have all withdrawn from the Net-Zero Banking Alliance, which aims to transition investments to align with pathways to net-zero emissions by 2050.
The alliance, initiated in 2021 with the United Nations, had pledged $61 trillion in financial assets. However, with Trump’s rise, banks are reluctant to continue their climate commitments due to fear of being labeled as “greenwashing” or restricted by conservative lawmakers.
Climate experts warn that this move could have severe consequences for financial safety and soundness. Rising global temperatures pose a significant threat to the US economy, with estimated losses already reaching $20 billion in insured losses from the LA wildfires. Banks’ reluctance to address climate change will only exacerbate these risks.
The withdrawal of banks from the Net-Zero Banking Alliance is a tragic irony given the growing urgency of addressing climate change. Climate destruction will still appear on their bottom lines, and succumbing to Trump’s agenda threatens their financial futures.
Source: https://prospect.org/economy/2025-01-10-big-banks-inopportune-moment-ditch-climate-commitments