Wells Fargo Exits Net-Zero Banking Alliance Following Goldman Sachs, Amid ESG and Political Pressure

Dec 20, 2024, 04:41 PM

Wells Fargo has announced its withdrawal from the Net-Zero Banking Alliance (NZBA), the world's largest climate alliance for banks, marking another high-profile exit following Goldman Sachs. This move is indicative of a broader trend among Wall Street firms distancing themselves from environmental, social, and governance (ESG) initiatives amid increasing political pressure. The decision comes after Texas Attorney General Ken Paxton's review of Wells Fargo's involvement in the NZBA, which he criticized for its anti-energy stance. Paxton had urged the bank to leave the alliance due to its ESG commitments, which he deemed unlawful under Texas law that prohibits state entities from contracting with companies boycotting the oil and gas industry. Following Wells Fargo's exit, Texas will cease its review, allowing the bank to continue business with the state. The NZBA, founded in April 2021, aims to align bank portfolios with net-zero emissions by 2050 and has seen over 100 banks join, despite the departure of a few members.