The unveiling of a new financial sector climate change initiative – the Net-Zero Banking Alliance – on April 21, 2021, has highlighted the ongoing tensions between the U.S.’s largest banks and the Biden administration’s attempts to leverage financial firms to take part in the fight against climate change. While Morgan Stanley, JP Morgan Chase, Wells Fargo, Citigroup, Goldman Sachs, and Bank of America all previously agreed to achieve net-zero emissions by 2050 or to sign Paris Climate Agreement-aligned targets, three of these banking giants – Wells Fargo, Goldman Sachs, and JPMorgan Chase – have yet to sign on to the newly unveiled Banking Alliance’s global sustainability efforts, raising questions about whether these major U.S. banks remain committed to their previous sustainability pledges.

The Net-Zero Banking Alliance sets up a common framework to track and verify emissions as well as setting interim goals for 2030. The Banking Alliance also seeks to identify ways to reduce financing for the oil and gas industries but does not expressly call for ending the financing of fossil fuels – a discrepancy which has been pointed to as largely inconsistent with a net-zero target given the decades long lifespan of such assets.

The Banking Alliance is currently comprised of 43 banks (including Citigroup, Morgan Stanley, and Bank of America), with combined assets totaling $28.5 trillion, that have committed to align “climate commitments with the Paris Agreement goals with collaboration, rigour and transparency.”

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