Wells Fargo & Co. has become the third US bank in 2024 to exit the Net-Zero Banking Alliance (NZBA), a United Nations-convened coalition aimed at aligning banking practices with global climate goals. The move follows increasing litigation and political pressure from US states supportive of the fossil fuel industry.
In a Dec. 20 statement, Texas Attorney General Ken Paxton claimed credit for Wells Fargo’s decision, citing a state review that labelled the bank as a “potential boycotter of energy companies” under Texas law. Paxton announced that the withdrawal would end Texas’s review of the bank, allowing state governmental entities to resume business with Wells Fargo. He also called on other financial institutions to abandon environmental, social, and governance (ESG) policies deemed “hostile” to the oil and gas sectors.
Wells Fargo confirmed its withdrawal but did not elaborate on the reasons behind the decision. Meanwhile, an NZBA spokesperson expressed regret over the departure, stating that the alliance prefers no member to leave but respects Wells Fargo’s decision.
The NZBA, formed in April 2021, has faced both defections and criticism. Germany’s GLS Bank exited in early 2023, citing findings that 72% of alliance members continued financing fossil fuel projects in Africa. UK-based OakNorth Bank PLC departed in February 2023, attributing the decision to resource constraints and a need to streamline memberships across climate-focused networks. Goldman Sachs Group Inc. left the coalition less than two weeks before Wells Fargo’s announcement.
These withdrawals highlight the challenges facing voluntary climate-focused business networks, which must balance competing pressures from political forces and environmental advocates. Critics argue that the NZBA is not enforcing stringent commitments among its members. On Dec. 16, 20 advocacy groups sent a letter to the alliance warning against complacency and urging stricter accountability to meet global climate goals. The groups expressed concern over members “backsliding” on their pledges to limit global temperature rise to 1.5°C above preindustrial levels, warning that such actions undermine the coalition’s purpose and jeopardize climate objectives.
