Morgan Stanley is officially bailing on the Net-Zero Banking Alliance, joining several other major banks that have recently made the same move.
What's happening?
Citigroup and Bank of America also announced this month that they would leave the global climate coalition, and Goldman Sachs and Wells Fargo dropped out in December.
Members of the Net-Zero Banking Alliance originally pledged to reach net-zero carbon emissions by 2050. Morgan Stanley said it is still committed to helping the world transition to net zero, according to Reuters, and that goal "remains unchanged."
"We aim to contribute to real-economy decarbonization by providing our clients with the advice and capital required to transform business models and reduce carbon intensity," the bank said in a statement.
Why is this important?
Unifying hundreds of global financial institutions to make positive changes for the good of the environment was a landmark achievement in the fight to lower harmful carbon pollution.
But recently, U.S. banks have faced pressure to align with politicians and play nice with the fossil fuel industry. This pressure is primarily coming from Republican politicians who receive a lot of financial backing from fossil fuel companies and in light of the new Donald Trump presidential term.
Only three U.S. banks appear to be left in the coalition: Amalgamated Bank, Areti Bank, and Climate First Bank.
What's being done about it?
Morgan Stanley still has climate targets and plans to hit them, according to its website: "Climate change is one of the most complex issues of our time, presenting both risks and opportunities for commerce, government, and civil society. As a global financial services firm, Morgan Stanley has an important role to play in helping to direct capital toward low-carbon solutions and achieve real-economy decarbonization."
But without the oversight and accountability from the Net-Zero Banking Alliance, the bank's detailed climate statements and commitments could ring hollow. Too many major corporations have followed a similar playbook by setting lofty climate goals and eventually failing or abandoning them altogether.
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