Over the past several weeks, each of the major US banks have announced their withdrawal from the Net Zero Banking Alliance (presumably in response to the policy priorities of the second Trump Administration). Although participation in this group may have been more a matter of “virtue-signaling” rather than expressing and adopting a meaningful commitment, the departure of the US banks was nonetheless noteworthy as demonstrating the changing political climate in the United States. During this same time period, in contrast, many of the European Union's largest banks have re-affirmed their commitment to the Net Zero Banking Alliance, declaring it a core component of their environmental and sustainability strategies.
This divergence between the US and EU with respect to the Net Zero Banking Alliance is illustrative of the increasing divide between the two major Western economies on an array of issues related to climate change. For example, while the SEC is preparing to dismantle the Biden Administration's climate disclosure law, the EU is maintaining--although possibly adjusting--its own climate disclosure laws. Navigating this divide is becoming increasingly complex for the many companies that operate in both jurisdictions, or simply have commercial ties and are subject to regulatory burdens on both shores of the North Atlantic.
Several of Europe’s biggest banks have declared their commitment to the world’s largest climate alliance for the industry, distancing themselves from Wall Street’s sudden exit from the group. . . . The declarations of support for NZBA follow a period of crisis for the alliance, which saw its biggest US members walk away in quick succession after the Nov. 5 election. President Donald Trump has since taken a wrecking ball to the climate agenda of his predecessor, including ordering that the US leave the Paris climate agreement. Though Europe is struggling with its own backlash against environmental, social and governance regulations, its biggest banks say they remain committed to working together to fight climate change.
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