The departure of US financial institutions from a prominent international climate coalition has escalated, with JPMorgan Chase being the most recent major bank to exit the Net Zero Banking Alliance.

This decision by the largest bank in America coincides with the departures of several other top lenders, such as Goldman Sachs, Morgan Stanley, and Citigroup, who have also left the climate initiative in recent weeks.

These withdrawals pose a significant setback for former Bank of England governor Mark Carney, who is currently evaluating a potential candidacy for Prime Minister of Canada. Carney aims to encourage the finance sector to take more substantial action in reducing greenhouse gas emissions. The alliance is part of the broader Glasgow Financial Alliance for Net Zero (Gfanz), which Carney launched in 2021 ahead of the Cop26 climate conference.

Similarly, other Gfanz-related alliances targeting the insurance and asset management sectors have witnessed a trend of American companies withdrawing, particularly in light of critiques from Republican politicians concerning climate initiatives. For instance, in November, three leading asset managers—BlackRock, Vanguard, and State Street—faced a lawsuit from a coalition of Republican-led states, accused of violating competition laws by using their investment leverage over coal firms to reduce fossil fuel production.

The pressure on corporations regarding their sustainability practices is expected to increase further if Donald Trump returns to the presidency later this month.

This evolving political landscape is believed to influence major US banks’ reconsideration of their participation in the Net Zero Banking Alliance, although the banks have not publicly cited specific reasons for their exits. Despite the ongoing withdrawals, the coalition still boasts over 140 member firms, including some of the largest banks in the UK.

The recent departures have prompted a strategic shift from Gfanz, which announced that it is now welcoming any financial entity that is committed to decarbonizing the economy, regardless of their affiliation with specific industry alliances.

JPMorgan indicated that it will continue to collaborate with Gfanz and other initiatives to promote realistic solutions and favorable market conditions that support a low-carbon and energy-secure future.