Wells Fargo has scrapped its target of achieving net-zero emissions across its financed portfolio by 2050, marking a significant retreat from its previous environmental commitments. The decision comes as banks worldwide reassess their sustainable lending strategies in response to shifting political and economic landscapes.
Announcing the move on Friday, Wells Fargo acknowledged that its net-zero goals were dependent on external factors beyond its control, including public policy, consumer behaviour, and technological advancements needed to facilitate clients’ transitions to greener business models.
“Many of the conditions necessary to facilitate our clients’ transitions have not occurred,” the bank stated, highlighting the challenges financial institutions face in balancing sustainability pledges with economic realities.
Wells Fargo’s decision reflects a broader shift in the financial industry, as political sentiment in Washington changes and banks reconsider their environmental, social, and governance (ESG) commitments.
The move follows a growing backlash against ESG investing in the United States, where some policymakers and corporate leaders have questioned its financial viability. In 2023, BlackRock CEO Larry Fink, once a prominent advocate of ESG, distanced himself from the term, stating it had been “weaponised” in political debates.
Adding to the retreat, Wells Fargo is also abandoning its interim 2030 sector-specific financed emissions targets, though it will continue to pursue its operational sustainability goals for 2030 and maintain its 2050 target for its own operational emissions.
The bank’s decision has sparked strong criticism from environmental organisations, which argue that financial institutions should be driving, rather than retreating from, climate action.
Ben Cushing, director of the Sierra Club’s sustainable finance campaign, called it an “outrageous abdication of responsibility.”
Similarly, Paddy McCully, senior analyst at Reclaim Finance, warned that Wells Fargo’s backtracking could put the economy, its shareholders, and the planet at greater risk.
The move follows Wells Fargo’s December withdrawal from the Net-Zero Banking Alliance (NZBA), a coalition of global banks committed to reducing financed emissions.
