Goldman Sachs Group Inc is walking away from the world’s biggest climate alliance for banks, in the latest sign that Wall Street is recalibrating its affiliation with such groups.
Goldman has decided to no longer be a member of the Net-Zero Banking Alliance (NZBA), the company said in a statement on Friday.
Firms are struggling to adapt to a deluge of increasingly fragmented environmental, social and governance (ESG) requirements from various standard-setters and jurisdictions. Goldman’s decision to leave NZBA was largely motivated by a need to comply with mandatory reporting guidelines, a person familiar with the matter said, adding that it would be helped by the rollout of the EU’s Corporate Sustainability Reporting Directive, the person said.
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“We have the capabilities to achieve our goals and to support the sustainability objectives of our clients,” the bank said in a statement. “Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world.”
A spokesperson for NZBA declined to comment. Members of the group commit to achieving net zero financed emissions by 2050 at the latest and to set interim five-year decarbonization targets.
The move comes amid intense and growing pressure from the US Republican Party on such coalitions, as part of a wider attack by the party on what it has characterized as “woke” capitalism. Last week, Texas Attorney General Ken Paxton led a move to sue BlackRock Inc, Vanguard Group Inc and State Street Corp for allegedly breaching antitrust laws by using climate-friendly investment strategies to suppress the supply of coal.
That suit followed bans against ESG investing across numerous Republican-controlled states, with pressure expected to step up now that US president-elect Donald Trump is headed for a second term in the White House.
Against that backdrop, banks and asset managers have scaled back their association with high-profile climate groups.
In August, the asset management arm of Goldman said it had quit the world’s biggest climate alliance for investors, known as Climate Action 100+ (CA100+). Other firms that have quit the alliance include the asset management arm of JPMorgan Chase & Co and Pacific Investment Management Co.
On Friday, Franklin Templeton said it “won’t renew its status” as a signatory with CA100+.
CA100+, the world’s largest investor group formed to fight climate change, had been helpful in providing early-stages support, but Franklin Templeton has now built enough internal expertise around climate investing to no longer require the assistance of the group, the company said in a statement.
A separate climate alliance for insurers, NZIA, was gripped by an exodus last year, as firms responded to threats of antitrust litigation brought by US Republican state attorneys general, while a net zero alliance for asset managers suffered a blow when Vanguard, the world’s second-largest money manager, quit back in 2022.
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