Big banks flee climate coalition formed to reduce carbon emissions

illuminem summarizes for you the essential news of the day. Read the full piece on The Wall Streeet Journal or enjoy below:

🗞️ Driving the news: Major U.S. banks, including Morgan Stanley, Citigroup, and Bank of America, have exited the United Nations-backed Net-Zero Banking Alliance, a coalition formed to push businesses toward carbon neutrality
• These moves follow similar withdrawals by Wells Fargo and Goldman Sachs amid increasing political backlash
• JPMorgan Chase, the only remaining large U.S. bank in the alliance, is reportedly considering leaving as well

🔭 The context: The Net-Zero Banking Alliance was launched during the pandemic as part of global efforts to combat climate change by aligning bank portfolios with net-zero carbon goals by 2050
• Republican lawmakers have criticized the coalition, labeling its policies as coercive and detrimental to economic growth
• The exits highlight the growing divide between environmental ambitions and political pressure in the U.S. financial sector

🌍 Why it matters for the planet: The retreat from net-zero commitments by key financial players undermines progress toward decarbonizing global economies
• These banks play a pivotal role in funding industries that significantly impact carbon emissions, and their withdrawal signals a shift in priorities away from sustainability
• It raises concerns over achieving international climate targets

⏭️ What's next: The departures may lead to a reevaluation of how financial institutions approach climate-related goals amidst political scrutiny
• Observers anticipate further tensions between environmental advocates and policymakers
• JPMorgan Chase’s decision on remaining in the coalition could set a broader trend for other institutions

💬 One quote: “The alliance was meant to drive meaningful change, but it’s become a lightning rod for political controversy,” - a senior banking executive familiar with the matter

📈 One stat: As of September 2024, the Net-Zero Banking Alliance comprised 144 member banks from 44 countries, collectively representing approximately 41% of global banking assets 

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