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Morgan Stanley (MS.US) exits climate group under pressure from Republicans, following Wall Street's lead.

Market IntelThursday, Jan 2, 2025 8:50 am ET

1min read

Morgan Stanley (MS.US) announced on Thursday that it would be leaving the Net Zero Banking Alliance (NZBA), an alliance aimed at achieving net-zero carbon emissions. This comes after Goldman (GS.US), Wells Fargo (WFC.US), Citigroup (C.US) and Bank of America (BAC.US) also announced their exits.

Wall Street banks have come under fire from Republican politicians who have attacked the banks' actions on climate change as part of an effort to undermine what they call "woke" capitalism. Last November, Texas led a lawsuit against BlackRock (BLK.US), Vanguard (AVD.US) and State Street (STT.US), accusing them of using climate-friendly investment strategies to suppress coal supply and violating antitrust laws.

Texas Attorney General Ken Paxton claimed the three asset managers used their market clout and membership in climate groups to pressure coal producers to cut production. The lawsuit alleged the power shortages have led to higher electricity bills for residents in states like Texas.

The NZBA works in coordination with the Glasgow Financial Alliance for Net Zero (GFANZ), a United Nations-backed group. GFANZ said earlier this week it was undergoing reforms to "double down on mobilizing private capital" and supporting energy transitions.

Banks including Goldman and Wells Fargo said they remained committed to their own net-zero goals and helping clients reduce their carbon footprints.

Large financial institutions in the US have reportedly been under constant pressure from Republicans to distance themselves from industry groups that support reducing carbon emissions, in the event of a Trump re-election.

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