Wells Fargo has said it will leave the Net-Zero Banking Alliance (NZBA), becoming the second major U.S. bank to leave the UN-backed coalition after Goldman Sachs left earlier this month. The NZBA was established in 2021 and consists of more than 140 banks from 44 countries, collectively managing assets worth around $73 trillion. It targets financial sector emissions to be in line with net-zero goals by 2050 and calls on members to develop intermediate 2030 goals concentrated on high-emitting sectors, including oil and gas, power, and aviation.
Wells Fargo became a member of the alliance in October 2021, after the company committed to reaching net zero GHG emissions by 2050, including those from its financing activities. The bank remains committed to its net zero goals and interim sectoral targets for reducing financed emissions, as it publicly displays on its website. The bank’s exit highlights rising tensions over climate-focused financial alliances in the U.S., especially as political pressure intensifies.
The NZBA is a subset of the larger Glasgow Financial Alliance for Net Zero, which brings together coalitions from the financial sector into a concerted effort to focus on addressing climate risks. These coalitions include NZAM and NZAOA, among others. Since GFANZ, despite some groups leaving its fold, has seen the closure of certain member groups, including the disbanding of Net Zero Insurance Alliance this year, NZBA had so far managed to avoid this type of exits until now.
Political pressure has been a major factor in the recent pullouts. Republican politicians in the U.S. have lambasted financial institutions for joining net zero coalitions, labeling them as being more focused on environmental causes than consumer and investor interests. Texas Attorney General Ken Paxton claimed credit for Wells Fargo, saying that the bank withdrew from the NZBA after his office reviewed its practices. Paxton had warned that Wells Fargo’s involvement in climate-focused initiatives could render the bank ineligible for state contracts, according to Texas laws that targeted companies perceived as boycotting fossil fuel industries.
In his statement, Paxton called the NZBA “an anti-energy activist organization” and welcomed Wells Fargo’s exit, saying it was a victory for Texas. He said his office had strongly urged the bank to reconsider its ESG commitments, and Wells Fargo confirmed its departure in December.
A spokesperson for the NZBA expressed disappointment over the decision but acknowledged the bank’s individual circumstances. They emphasized the alliance’s continued relevance, noting that over 100 banks from more than 35 countries have joined the NZBA since its inception, with only five departures over the same period. The spokesperson highlighted the importance of addressing climate risks and advancing net zero transitions in the financial sector.
This comes at a time when broader challenges face climate-focused coalitions, especially in politically divided regions like the U.S. The NZBA remains an important initiative for global banks as it strives to tackle climate risks, but this growing political pressure could inform future participation and the path of global net zero efforts.