Wells Fargo Exits Climate Initiative

(Reuters) – Wells Fargo (NYSE:WFC) has withdrawn from a group of global banks committed to curbing greenhouse gas emissions, marking a trend of high-profile firms exiting climate initiatives due to increasing political pressure.

The bank announced its departure from the Net-Zero Banking Alliance (NZBA) on Friday, shortly after Goldman Sachs made a notable exit as well.

Financial institutions have faced criticism for their connections to the fossil fuel industry. While many have attempted to implement net-zero standards, recent political pressures have led some to scale back these commitments to avoid backlash from Republican officials.

In the previous month, major asset management firms like BlackRock (NYSE:BLK), Vanguard, and State Street (NYSE:STT) were accused by Texas and 10 other Republican-led states of violating antitrust laws through climate activism.

Wells Fargo has not provided a specific reason for its departure. An NZBA spokesperson expressed that while the alliance prefers not to see banks leave, it respects Wells Fargo's decision based on its individual circumstances.

The NZBA is a coalition of banks that aims to align their lending and investment portfolios with net-zero emissions by 2050.

Since its formation in April 2021, the alliance has garnered over 100 banks, although five have exited. The spokesperson noted that the overall increase in membership signifies the growing importance of understanding climate risk among banks and companies worldwide.

Wells Fargo’s exit was initially reported by Bloomberg News earlier on Friday.