Mark Carney’s pioneering initiative to encourage the financial sector to reduce greenhouse gas emissions has suffered another setback after Morgan Stanley became the latest US bank to leave the Net Zero Banking alliance.
The US investment bank follows other Wall Street banks, including Goldman Sachs, Citigroup and Bank of America, in leaving the group in recent weeks.
Their exit is a blow to the coalition, which is part of the wider Glasgow Financial Alliance for Net Zero headed by Carney, a former governor of the Bank of England. Carney launched the coalition in April 2021 to incentivize banks, insurers and asset managers to reduce financing for high-emitting projects and invest in clean alternatives.
However, Morgan Stanley insists it remains committed to its net-zero goals, noting that its mission to decarbonise the “real economy” by advising and financing greener business models continues unabated. The bank did not specify the reason for its withdrawal.
The Glasgow coalition has faced increasing pressure from Republican politicians in the US, who have denounced net zero initiatives as harmful to the energy sector and broader economic interests. This opposition has already led insurers and asset managers to withdraw from parallel climate groupings under the coalition’s umbrella.
Carney, who left the Bank of England in 2020, initially hailed the group as a major achievement in mobilizing climate finance, designed to guide the world’s largest financial institutions towards supporting the transition to a net-zero economy. However, the recent wave of high-profile departures highlights the political and business challenges that remain.
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