The beginning of the year is a chance for a fresh start: to shed bad habits, make good on New Year’s resolutions, and turn over a new page. Some of the world’s biggest banks, accordingly, rang in 2025 by announcing their departure from the Net-Zero Banking Alliance, or NZBA. Citibank, Bank of America, and Morgan Stanley all announced this week that they’re leaving the coalition, which seeks to align banks’ financing activities behind the goal of reaching net-zero emissions by 2050. Wells Fargo and Goldman Sachs left in December.
With Donald Trump set to be inaugurated in less than three weeks, the banks’ exodus may well mark the end of financial institutions and other corporations pretending to have some ethical commitment to decarbonization.
NZBA was part of the broader Glasgow Financial Alliance for Net-Zero, launched by former Bank of England governor turned green investment guru Mark Carney in 2021. In the lead-up to the U.N. climate talks in Glasgow that year, GFANZ was among a number of voluntary initiatives purportedly showing that momentum for climate action was sweeping corporate boardrooms. GFANZ, especially, boasted audacious numbers: $130 trillion “relentlessly, ruthlessly focused on net zero,” as Carney said at the time. (These figures were always a little funny. That $130 trillion figure referred to the total number of assets that groups that signed onto GFANZ commanded, not actual dollars committed to reducing emissions; much of that $130 trillion was still heavily invested in fossil fuels, with few concrete plans to change course.)
There were practical reasons these flashy, voluntary initiatives emerged when they did. In 2021, the U.K. presidency of the Glasgow climate talks, or COP26, was eager to throw some big numbers around as a sign of its success as a host. Then too, interest rates were low, and carbon-intensive companies—including oil and gas drillers—were hurting as demand limped back amid easing pandemic travel restrictions. So moving away from fossil fuels, however nominally, seemed less risky than it might have earlier as those firms struggled. Meanwhile, the new Biden administration and EU both promised ambitious climate action. Faced with the possibility of new emissions-reporting requirements or subsidies for green energy technologies being imposed in the near future, companies may have reasoned they could reap good P.R. from instituting some easier green policies voluntarily, like getting their books in order to track the carbon footprint of their investments, and investing in stuff that could make money.
Years later, those conditions have changed. Fossil fuel companies made record profits as demand soared back and the world sought to replace Russian oil and gas after Putin invaded Ukraine in early 2022. The Biden administration’s climate plans emphasized subsidizing low-carbon energy rather than penalizing fossil fuels, and the EU rolled back more ambitious plans along those lines as part of a renewed focus on “energy security,” including a building spree for liquefied natural gas import infrastructure. AI “hyperscalers” are also pledging to build fleets of energy-intensive data centers that—at least for a while—will require lots of fossil fuels. Trump’s reelection and the collapse of centrist governments in Europe that championed green investment plans may well be an opportunity for companies to more publicly embrace what they’ve done all along: try to make as much money as possible, whatever that means for the planet.
American conservatives, meanwhile, have celebrated banks’ departures from NZBA as a win for their war on “woke” financial institutions, which they argue have prioritized environmental, social, and governance, or ESG, investment criteria and diversity, equity, and inclusion, or DEI, initiatives over profit.
The anti-ESG push—led by the likes of the Texas Public Policy Foundation and the State Financial Officers Association—has also spawned a cottage industry for “anti-woke” asset managers that offer investment products like the “God Bless America” and “MAGA” exchange-traded funds that exclude allegedly woke companies in favor of patriotic ones. One such firm run by Trump 1.0 Labor Secretary Andy Puzder shut down after three years of operation in 2023 after having “failed to attract enough assets to maintain research and operations,” per the Financial Times. Another, still-operational anti-woke asset and wealth management company was started by Trump’s pick to run the Department of Government Efficiency, Vivek Ramaswamy. The next administration could empower the anti-ESG crusade with new tools, including Department of Justice probes. And regardless of the precise policies the Trump administration intends to pursue, early rhetoric from the Trump campaign and transition team has emboldened companies to ditch watery net-zero pledges and warm up to a White House and Congress eager to supercharge fossil fuels.
Banks leaving NZBA have, naturally, simultaneously defended their green bona fides. Morgan Stanley, for instance, argues that its commitment of helping the world transition to net-zero carbon emissions “remains unchanged,” and that it plans to “contribute to real-economy decarbonization by providing our clients with the advice and capital required to transform business models and reduce carbon intensity.”
Banks exiting voluntary initiatives like NZBA won’t make or break decarbonization plans, of course. It mostly signals banks’ new freedom to publicly double down on first principles. If banks see a way to make money on green energy technologies, that is, the fact that they’re no longer part of some voluntary net-zero alliance won’t get in the way. If there is money to be made in fossil fuels—and there certainly is—then right-wing, climate-reactionary governments here and abroad will cheer on companies’ efforts to profit off of that too.