America's largest banks are retreating from climate alliances, marking a reversal of the significant green push that characterized the financial sector in the early 2020s. JPMorgan Chase, Bank of America, Goldman Sachs, Citigroup, Morgan Stanley, and Wells Fargo have all withdrawn from the Net Zero Banking Alliance, according to a report by the Committee to Unleash Prosperity. While most of these departures occurred between late 2024 and early 2025, the report highlights a broader trend of declining support for major 'net zero' initiatives among financial institutions.
The Committee to Unleash Prosperity states that support for these initiatives has fallen by nearly 90 percent over the past four years. Jerry Bowyer, CEO of Bowyer Research and a study author, told the Daily Mail that this retreat signifies a fundamental change in how Wall Street approaches climate policy. The net-zero finance boom, which began around 2020-2021, saw the finance industry treating net zero as a prerequisite for global acceptance. However, Bowyer noted that "reality intruded," citing factors such as energy demand, fiduciary responsibilities, antitrust concerns, political pressures, and the practical challenges of transforming the global energy system as contributors to this reversal.
The Net Zero Banking Alliance, established in 2021, rapidly expanded to include 140 banks managing $75.5 trillion in assets by November 2024. However, major U.S. banks began exiting, with Goldman Sachs leaving in December 2024, followed by others. By October 2025, the alliance transitioned from a membership model to offering voluntary climate guidance.
This trend extends beyond banking. The Net Zero Asset Managers initiative, which once boasted over 300 members overseeing nearly $60 trillion, suspended operations in January 2025 after significant U.S. firms like BlackRock withdrew. It later relaunched with less stringent requirements and a focus on guidance. Climate Action 100+, another environmental coalition, has also seen departures from financial institutions, including JPMorgan and BlackRock's U.S. operations.
Despite these withdrawals, financial institutions have not entirely abandoned environmental concerns. Some banks continue to publish sustainability policies, maintain emissions reporting, or participate in less prominent climate organizations. Morgan Stanley, Bank of America, Pimco, and Citigroup are noted as retaining stronger ties with environmental groups. Bowyer suggests that while firms may retain climate-related public relations, the "grandiose alliance model has been badly damaged." He anticipates that more institutions will shift towards focusing on fiduciary duty, energy realism, and client choice.
Wells Fargo, for instance, abandoned its sector-specific 2030 financed-emissions targets and its 2050 net-zero goal in February 2025, stating that conditions necessary for clients' transitions had not materialized. Vanguard was an early departure from the asset management initiative in December 2022.
The political landscape has also influenced these decisions. In October 2022, 19 state attorneys general initiated an antitrust investigation into six major U.S. banks concerning their participation in the Net Zero Banking Alliance. Bowyer posits that while politics played a role, the primary drivers for the retreat are the laws of physics and economics.
Furthermore, the burgeoning demand for electricity driven by artificial intelligence and the development of large data centers are presenting new challenges. This trend forces a confrontation with the reality that the technology powering economic growth requires substantial and reliable power, with conventional energy sources remaining a critical component. Bowyer views this as a clear indication of the practical limitations of the net-zero model, emphasizing that "modern economies run on energy, and energy systems cannot be transformed by press release."
The shift represents a notable departure from the peak of ESG investing in the early 2020s, which saw substantial inflows into environmentally focused funds. However, ESG and climate investing are not entirely defunct. European investors remain more engaged, and some U.S. financial entities continue to uphold emissions targets and sustainability programs. What appears to be diminishing is the necessity for every major Wall Street institution to participate in high-profile climate coalitions, a trend Bowyer believes may persist, describing Wall Street's move away from net zero as "the market correcting a political mistake."