JPMorgan Chase has decided to exit the Net-Zero Banking Alliance (NZBA), marking a significant development in the ongoing trend of financial institutions stepping away from the UN-backed coalition. The departure of JPMorgan, confirmed by ESG Today, follows the recent exits of other major U.S.-based banks, including Citi, Bank of America (BofA), Morgan Stanley, Goldman Sachs, and Wells Fargo. The only US banks left listed on the NZBA website now are Amalgamated Bank, Areti Bank, and Climate First Bank. In a statement to ESG Today, JPMorgan Chase explained that although it was leaving the NZBA, the firm would continue to independently pursue its goals of advancing low-carbon technologies and energy security. The bank emphasized that it would continue to focus on supporting its clients in energy transitions and the decarbonization of various sectors of the economy. “We will continue to work independently to advance the interests of our firm, our shareholders and our clients and remain focused on pragmatic solutions to help further low-carbon technologies while advancing energy security,” the spokesperson said.
JPMorgan Chase had joined the NZBA in October 2021, shortly after the alliance’s launch. As a member, the bank had committed to aligning its operational and attributable greenhouse gas emissions from financing activities with net-zero pathways by 2050. This also involved setting targets for reducing financed emissions in key sectors, with an initial focus on emissions-intensive industries. The NZBA had grown in leaps and bounds since its inception, now having over 140 banks since the founding with 43. As of 2024, the group was representing $74 trillion in assets. However, the group faces increasing pressure. In particular, politicians from the Republican side in the United States warned that financial institutions involved in climate-focused initiatives are violating legal frameworks and could face exclusion from state business. This is part of a larger anti-ESG political movement that has been building in recent months.
The NZBA was part of the Glasgow Financial Alliance for Net Zero (GFANZ), a coalition of financial sector groups committed to achieving net-zero emissions. GFANZ comprises initiatives such as the Net Zero Asset Managers (NZAM), Net Zero Asset Owner Alliance (NZAOA), and the Net Zero Investment Consultants Initiative (NZICI), among others. GFANZ announced a significant restructuring last week, which saw it refocus its efforts to mobilize capital for the low-carbon transition and expand participation to firms that are not part of the net-zero coalitions.
JPMorgan’s departure also comes at a time when the bank has made public commitments toward aligning its financing activities with the Paris Agreement. In October 2020, the bank agreed to assist its customers in navigating their transition toward a low-carbon world and published net-zero-aligned financed emissions reduction targets for eight high-emission sectors: Oil & Gas, Electric Power, Auto Manufacturing, Aviation, Shipping, Iron & Steel, Cement, and Aluminum. The targets still exist on the bank’s website, making the commitment in reducing emissions of the said sectors since its departure from the NZBA still stands.
The bank added that its decision to leave the NZBA does not mean that it is done with its efforts to combat climate change. JPMorgan Chase said that it would continue to work with GFANZ and other similar organizations, focusing on advancing pragmatic solutions that support both a low-carbon economy and energy security. While the exit does represent a change in the bank’s strategy for climate-focused partnerships, the company’s commitment to a low-carbon future remains unchanged, but through different channels beyond the NZBA.
The JPMorgan exit, along with other major U.S. banks, underscores a widening gap in the financial sector on how to address ESG issues. As political pressure grows and the spotlight turns to more pragmatic, market-based solutions, the banking sector reaches a critical crossroads in trying to balance its pursuit of environmental sustainability with financial and political concerns. The future of financial institutions’ engagement with global climate goals will continue to change according to these changing dynamics.