Morgan Stanley said on Thursday it had decided to leave a UN-backed climate alliance — joining rivals Goldman Sachs and Citi in ditching the group amid conservative backlash toward environmental and diversity initiatives.
The Wall Street investment bank gave no reason for its decision to exit the Net-Zero Banking Alliance, a pledge to achieve net-zero greenhouse gas emissions by 2050.
Citigroup and Bank of America said they were leaving the group earlier this week, and Goldman Sachs and Wells Fargo made the same announcement in early December.
The NZBA declined to comment.
In a statement, Morgan Stanley told The Post it is still committed to achieving net-zero financed emissions and will continue to “report on our progress as we work towards our 2030 interim financed emissions targets.”
A US-based environmental advocacy group urged New York state on Thursday to regulate the financial sector and ensure its policies align with climate goals.
“These exits reveal the inadequacy of voluntary commitments and underscore the urgent need for state-level leadership and regulation,” Vanessa Fajans-Turner, executive director of Environmental Advocates NY, said in a statement.
In November, Texas led a lawsuit of 11 Republican states against BlackRock, Vanguard and State Street. The states accused the money managers of “conspiring to artificially constrict” the coal market with anticompetitive practices, Texas Attorney General Ken Paxton said in a press release.
The states alleged the firms built up huge stakes in coal producers and then supported environmental initiatives that lessened coal production to send prices skyward.
Republican-led campaigns against environmental, social and governance (ESG) goals, which include diversity and inclusion policies, gained steam last year.
Conservative activist Robby Starbuck, for example, spearheaded a series of successful boycotts on X to pressure US companies to dissolve their diversity, equity and inclusion (DEI) practices.
Most recently, Nissan Motor announced in December it would roll back its diversity initiatives after “productive conversations” with Starbuck. Other major red-state employers like Tractor Supply, John Deere, Harley-Davidson and Walmart last year axed their diversity initiatives.
In a statement, Citi told The Post that it decided to leave the NZBA to focus its attention on the Glasgow Financial Alliance for Net Zero (GFANZ) as the group undergoes a restructuring.
Earlier this week, Bloomberg reported that GFANZ, an umbrella group for climate alliances, is adjusting how it works with its industry-specific sub-groups after the wave of bank retreats, according to a person familiar with the decision.
Companies can now go to GFANZ for guidance on climate initiatives, but they don’t have to pledge to the NZBA, which follows the Paris agreement and its net-zero goals, according to the report.
“In light of this shift, and Citi’s progress towards its own net zero goals, we have decided to leave the Net Zero Banking Alliance,” Citi said in a statement. “We remain committed to reaching net zero and continue to be transparent about our progress.”
Goldman Sachs, which announced it was quitting the climate initiative in December, said it has made significant progress on its net-zero goals and remains committed to sustainability.
“We have the capabilities to achieve our goals and to support the sustainability objectives of our clients,” the bank told The Post in a statement. “Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world.”
Wells Fargo declined to comment on its decision to leave the NZBA, and Bank of America did not immediately respond to a request for comment.
Throughout 2024, Morgan Stanley backed off some of its previous environmental goals. In a report published in September, the bank left out an earlier pledge to remove or reduce 50 million metric tons of plastic waste by 2030. The bank also warned of “unintended consequences” from too quickly taking away financing for high-carbon clients who later plan to decarbonize.
