Major U.S. Banks Exit Net-Zero Banking Alliance Amid Texas AG Pressure

In a move that's sure to stir debate on both sides of the climate policy table, all major U.S.-based banks, namely Bank of America, Morgan Stanley, and JPMorgan, have officially exited the Net-Zero Banking Alliance (NZBA) following the insistence of Texas Attorney General Ken Paxton. The NZBA, a group considered by critics to be anti-oil and gas, advocates for financial partners to embrace ambitious climate initiatives, a directive the Attorney General asserts flies in the face of the obligations owed to consumers and investors alike.

Attorney General Paxton opened a review last October, as reported by the Texas Attorney General's Office, to verify if the affiliation of these banks with the NZBA made them energy boycotters under Senate Bill 13, a Texas statute that bans government entities from contracting with companies that shun the energy sector the review also tasked with determining whether these financial institutions should be prohibited from entering into contracts with government entities in Texas.

Adding to the wave of withdrawals, Wells Fargo has also ended its tenure with the NZBA following similar pressure from Paxton. His office underscored the importance of such a decision, stating that “More and more financial institutions are taking a major step in the right direction by leaving the radical and anti-energy Net-Zero Banking Alliance. The NZBA seeks to undermine our vital oil and gas industries, and membership could potentially prevent banks from being able to enter into contracts with Texas governmental entities.” As more institutions sever ties with the alliance, Paxton wraps up his evaluations, signaling an end to contentious relations with these major financial players — for now, according to the Texas Attorney General's Office.