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Morgan Stanley Latest Wall Street Giant to Ditch Net-Zero Coalition
Earlier this week, Bank of America and Citigroup also said they were leaving the Net-Zero Banking Alliance.
Jan 02, 2025
On Thursday, the Wall Street titan Morgan Stanley became the latest financial institution to leave the Net-Zero Banking Alliance, a United Nations-convened group of banks committed to "aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050."
The defections keep piling up. Earlier this week, Bank of America and Citigroup said they were leaving the alliance, and earlier in December Goldman Sachs Group and Wells Fargo announced they were doing the same.
“We will continue to report on our progress as we work towards our 2030 interim financed-emissions targets,” Morgan Stanley toldBloomberg in an email.
While Morgan Stanley didn't offer an explanation for the exit, according to Reuters, financial firms have repeatedly found themselves in the crosshairs of some members of the GOP who argue that corporate efforts to limit fossil fuels run afoul of antitrust law.
Last summer, the Republican members of the House Judiciary Committee published a report accusing financial institutions colluding to impose "radical environmental, social, and governance (ESG) goals on American companies." Their probe was largely focused on another climate group, Climate Action 100+, which is made up of financial institutions who strive to engage companies they invest in on climate issues. That coalition has also experienced a number of defections.
In December, 11 GOP-led states sued three asset managers in federal court, arguing that the firms had "artificially constrained the supply of coal, significantly diminished competition in the markets for coal, increased energy prices for American consumers, and produced cartel-level profits" for the firms in violation of antitrust law.
Despite the stated goals of the Net-Zero Banking Alliance, Morgan Stanley and other firms who are a part of the alliance have remained a major financial life lines for fossil fuel companies.
According to a report published by a group of NGOs in 2023, 56 of the largest banks in the Net-Zero Banking Alliance—including Morgan Stanley—have provided nearly $270 billion in the form of loans and underwriting to more than 100 "major fossil fuel expanders," from Saudi Aramco to ExxonMobil to Shell.
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'Laggards': Top 6 Wall Street Banks Failing on Net-Zero Climate Pledges
"Wall Street banks need to walk the walk, and their regulators, clients, and shareholders need to do more to hold them accountable."
Oct 09, 2024
Sierra Club on Wednesday issued a report showing that the United States' six largest banks lag behind in efforts to meet 2030 and 2050 climate emissions targets they've set, as they continue to pour billions of dollars into fossil fuel financing every year.
The 29-page report, Leaders or Laggards: Analyzing Major U.S. Banks' Net-Zero Commitments, assesses the progress of JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley on efforts to meet 2030 targets, exclusion policies, and climate disclosure policies—the overall aim is to track their progress toward net-zero across their portfolios by 2050, which each has pledged to do.
"The role of major banks is critical for ensuring a sustainable and prosperous future," Ben Cushing, director of the Sierra Club's Fossil-Free Finance campaign, said in a statement.
"We cannot solve the climate crisis if they continue with business as usual," he added. "While the largest U.S. banks have committed to reaching net-zero emissions by 2050, they are evidently not yet on track to make it happen."
"Wall Street banks need to walk the walk, and their regulators, clients, and shareholders need to do more to hold them accountable," he concluded.
Major US banks @Chase @BankofAmerica @Citi @WellsFargo @GoldmanSachs @MorganStanley could actually make progress toward net-zero by:
1️⃣ Improving 2030 targets
2️⃣ Strengthening exclusion policies
3️⃣ Enhancing transparencyhttps://t.co/CcZzTCrGKi pic.twitter.com/PpPDXTApfQ
— Sierra Club (@SierraClub) October 9, 2024
The report's titular question is answered in the concluding section. "In general, the targets and exclusion policies of the major U.S. banks fall far behind international best practices and what is required in order to achieve their own climate commitments," it says.
"[They] have serious improvements to make in order to ensure their 2030 targets and financing policies are truly aligned with the goal of reaching net-zero by 2050," it also says.
The report provides detailed standards that banks must uphold if they want their net-zero policies to be "robust," and lays out examples of how each bank is failing to meet them.
The six banks are "relatively equal" in terms of their progress toward net zero, but there are some differences between them, the report says.
For example, only Citigroup and Wells Fargo have committed to reduce absolute emissions in the oil and gas sector—a key standard. The other four banks have merely set "emissions intensity" targets. Wells Fargo is the only one of the six to declare that its carbon accounting for 2030 won't include offsets or removal.
Bank of America, for its part, has backtracked on earlier climate pledges. Previously, the bank promised not to directly fund oil and gas drilling in the Arctic, but in December it announced it would simply apply "enhanced due diligence" to such projects.
One key standard that banks should employ is separating their emissions bookkeeping for lending and underwriting, the report says. Underwriting accounts for roughly half of banks' fossil fuel financing but is harder for the public to track than lending.
"Some banks limit their sectoral targets to cover lending, but exclude underwriting, creating a massive loophole through which billions of dollars can still be poured into heavily emitting sectors and projects," the report says.
In general, the report urges more standardization of climate accounting methods along with improved transparency and disclosure policies.
Four of the six banks are in fact in the top five on the list of global banks financing the fossil fuel industry since the Paris agreement was signed, according to the latest Banking on Climate Chaosreport, released in May. And when only financing for companies expanding oil and gas projects are considered, rather than just continuing to extract from existing reserves, the U.S. banks remain at the top.
"By far the most essential action that banks must take to reach their net-zero goals is to commit to ending support for expansion of fossil fuel production," the Sierra Club report says, citing Banking on Climate Chaos.
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Faith Leaders Chain Themselves to Citi HQ to Protest Fossil Fuel Financing
"We cannot profit off of death and destruction," one participant said. "We must love each other and the Earth."
Jul 30, 2024
Two dozen faith leaders and their supporters were arrested on Tuesday after chaining themselves to the doors of Citigroup's New York City headquarters to protest its financing of the climate emergency.
Around 50 people participated in the protest, which is part of the Summer of Heat series of actions demanding that Wall Street—and Citi in particular—stop funding oil, gas, and coal.
"I am here because I believe that there is a god in everyone and that calls us to take responsibility for destruction done in our name," Lina Blout of Earth Quaker Action Team said as she was being arrested. "We are all connected. We must live for the planet and each other, and not short-term profit."
Citi was the leading financier of fossil fuel expansion since the Paris agreement entered into force in 2016, spending $204 billion on the development of new oil, gas, and coal. It was also the second leading funder of fossil fuels over all, at nearly $400 billion. In addition to ditching climate-warming energy sources, participants in Summer of Heat want banks like Citi to "exponentially" up funding for renewables, respect the human rights of Indigenous and local communities, and contribute to a "climate reparations fund."
"We cannot profit off of death and destruction," Blout said. "We must love each other and the Earth."
Tuesday's action, led by GreenFaith, was part of the Summer of Heat's Faith Week, running from July 28 to August 3.
"We the people will not tolerate the bad practices of companies like Citi to fund and invest in oil companies who kill our world and it's future."
"Our faiths teach us that the Earth is a sacred trust and we are responsible for its care," GreenFaith wrote on social media. "Why is Citi continuing to violate that trust by giving hundreds of millions of dollars to oil and gas companies? We're here telling Citi: We can do better. We must do better!"
The faith leaders, dressed in white, converged on Citi at around 7:50 am Eastern Time. A total of eight people locked themselves to the doors, causing "chaos" as employees tried to enter for work. The blockade lasted for around half an hour.
"If you've got to walk through a gauntlet of protesters and cops to get to your job maybe you're working at the wrong place," nonprofit consultant Valerie Costa wrote in response to footage of the protest.
Among those arrested at the action were two frontline leaders from the U.S. Gulf Coast, which has been treated as a sacrifice zone by the oil and gas industry for decades.
"There is no future if we were to allow big oil and gas industries who produce death chemicals and products that will wipe out society," Debra Sullivan Ramirez, the president, CEO, and founder of Mossville Environmental Action Now, who was arrested Tuesday, told Common Dreams. "We the people will not tolerate the bad practices of companies like Citi to fund and invest in oil companies who kill our world and it's future."
In one incident, Citi security tried to force open a door while a protester was still chained to it, and then to yank him away from the door. When police joined in, the protester fell down.
"Police were contorting his legs behind the door," another demonstrator said, adding that "it looked painful."
Tuesday's protest brings the total number of arrests from Summer of Heat actions up to more than 450 since June 10, according to organizers.
It also follows a week that saw the four hottest days on record and comes as a heat dome is expected to descend upon much of the U.S., putting the Southwest, Southeast, and Great Plains at particular risk for potentially deadly heat, the Union of Concerned Scientists (UCS) warned.
"Fossil-fuel driven climate change has increased the frequency and severity of extreme heat events over the last half century," UCS said.
The group urged local, state, and national authorities to take immediate measures to protect people such as implementing heat plans, ensuring access to cooling centers, and enshrining protections for outdoor workers.
"But ultimately," UCS said, "limiting the number of days of extreme heat in the long term necessitates that policymakers and decision-makers in all sectors of society do their part to cut heat-trapping emissions, halt the decades-long deception and obstruction by fossil fuel companies that has enabled runaway climate change, phase out fossil fuels, and accelerate the transition to a clean and just energy system."
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