Banking giant Goldman Sachs has backed out of a coalition of institutions working to align financial activities with efforts to fight climate change.
What's happening?
In December, Goldman Sachs withdrew from the Net-Zero Banking Alliance, a voluntary coalition of financial institutions aiming to reach net-zero emissions by 2050, according to Reuters.
"We have made significant progress in recent years on the firm's net zero goals and we look forward to making further progress, including by expanding to additional sectors in the coming months," Goldman Sachs said in a statement to Reuters. "Our priorities remain to help our clients achieve their sustainability goals and to measure and report on our progress."
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The outlet noted that the company did not give a specific reason for leaving the NZBA but speculated that political pressure from some Republican politicians, including the suggestion that membership could breach antitrust rules, may have played a factor.
Why is Goldman Sachs leaving the NZBA important?
Goldman Sachs' departure appears to have kicked off a wave of other banks ditching NZBA membership. In early January, Yahoo Finance reported that Morgan Stanley, Citigroup, Bank of America, and Wells Fargo had all left the coalition. It also reported that a similar group, Climate Action 100+, had lost JPMorgan Chase, State Street, and Pimco as members in recent months.
While several of these institutions have said they remain committed to their climate goals, it does not bode well for a unified front in the effort to meet these goals globally. And as Reuters pointed out, many of these companies have ties to financing the fossil fuel industry, which they have been criticized for in the past. Some Republican lawmakers have criticized climate alliance membership as a hindrance to financing the industry.
Rep. Jim Jordan, a Republican from Ohio, called the banks' withdrawals from Climate Action 100+ "big wins for freedom and the American economy," adding that "we hope more financial institutions follow suit in abandoning collusive [environmental, social, and governance] actions," per Yahoo Finance.
What's being done about banks leaving the NZBA?
Holding these banks accountable may seem impossible, but some options are available. You can track banks' net-zero pledges and avoid institutions that fail to meet or maintain their goals as well as stay up to date on participation in the NZBA and other alliances through BankTrack. You can also switch to a green bank and credit card using Bank for Good's tools.
It's also important to reach out to your representatives and voice your concerns about policies that weaken efforts to combat climate change.
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