Ahead of Trump presidency, U.S. banks abandon Mark Carney climate

“Right here, right now, is where finance draws the line,” proclaimed Mark Carney, the UN special envoy for climate action, in 2021, on stage at the UN Climate Change Conference in Glasgow.

More than 160 financial institutions signed onto a kind of climate finance super-group known as the Glasgow Financial Alliance for Net Zero (GFANZ). At the time, Carney — who’s now an expected contender for Liberal leader — called it a watershed moment for the energy transition.

But for some of those banks, it appears the moment has passed. 

Parts of the UN-sponsored initiative — originally designed to get banks aligned on and sharing investment practices for net-zero goals — are seeing notable dropouts. One offshoot, the Net-Zero Banking Alliance (NZBA), has seen every major U.S. bank quit in the span of the last month. The latest, JPMorgan Chase, offered no reason but said it “remain[s] focused on pragmatic solutions to help further low-carbon technologies while advancing energy security.” 

Despite the NZBA subunit growing to more than 140 banks — holding trillions of dollars in assets that experts say will be needed to transition away from environmentally damaging fossil fuels — there are now fears these departures will spur a larger exodus, including from Canada’s major financial institutions. 

Anti-ESG backlash

Though none of the departing banks offered a reason for leaving, climate finance experts pointed to the elephant in the room. 

“All the U.S. banks are running scared of Trump 2.0,” says Paddy McCully, a California-based environmentalist and senior analyst at the French non-profit Reclaim Finance. “Their fear over being attacked by Trump is much greater than their climate commitment, so they all ditched the NZBA.”

Recent years have seen a backlash against ESG investing — which follows environmental, social and governance principles — with U.S president-elect Donald Trump actively campaigning against it. 

There has also been a lawsuit and probes led by Republican lawmakers against giant investment firms like BlackRock. They allege these climate initiatives are anti-competitive, by pressuring the coal companies in the firms’ portfolios to reduce their output in order to meet climate goals. That legal action was enough for BlackRock to announce its departure from another GFANZ offshoot, the Net Zero Asset Managers Initiative. 

Critics say this hasn’t been spurred by the public’s desire to see their money invested away from these causes.

“It’s not a real political movement of citizens,” says…