Major U.S. Banks Abandon Climate Alliance Amid Political Pressure

Citigroup Inc. and Bank of America Corp. have announced their departure from the Net-Zero Banking Alliance (NZBA), a prominent global coalition aimed at aligning banking practices with the Paris Agreement's climate goals. This move follows similar exits by Goldman Sachs and Wells Fargo earlier this month, signaling a broader shift among major U.S. financial institutions.

Growing Political Pressure

The decision by Citigroup and Bank of America comes amid mounting pressure from Republican lawmakers, who have criticized Wall Street's involvement with climate-focused initiatives. These lawmakers argue that banks should distance themselves from groups advocating for reduced carbon emissions, which they claim could hinder economic growth and energy security.

Despite their withdrawal from NZBA, Citigroup has reaffirmed their commitment to supporting clients in transitioning to a low-carbon economy. We remain dedicated to helping our clients achieve their sustainability goals while balancing the need for energy security, a Citigroup spokesperson noted.

Challenges for Climate Alliances

Both Citigroup and Bank of America have been significant players in green finance. Citigroup ranks as the fourth-largest underwriter of green bonds globally since 2020, trailing only BNP Paribas, JPMorgan Chase, and Credit Agricole. Bank of America is also a major participant, ranking eighth in the same period.

The recent wave of Wall Street exits highlights the challenges facing global climate coalitions. With Republicans gaining political ground, federal-level initiatives to drive energy transitions appear increasingly unlikely. In response, climate organizations are seeking to mobilize private capital to sustain momentum for renewable energy and decarbonization efforts.