Wells Fargo Says It’s Quitting Climate-Banking Group

Wells Fargo & Co. said it’s leaving the world’s biggest climate alliance for banks, in the latest sign that Wall Street is breaking away from such groups.

The company said in a statement Friday that it ended its membership in the Net-Zero Banking Alliance. The bank, based in San Francisco, didn’t provide an explanation for its decision.

Wells Fargo’s departure follows Goldman Sachs Group Inc., which announced earlier this month that it was quitting NZBA. Financial companies have been under increasing pressure from Republican lawmakers, which have launched investigations and filed lawsuits related to the industry’s efforts to address climate change.

The House Judiciary Committee, led by Ohio Republican Jim Jordan, said last week that it’s found “substantial evidence of collusion and anticompetitive behavior” by financial companies. Separately, BlackRock Inc., Vanguard Group Inc. and State Street Corp. have been sued by a group of states led by Texas for allegedly breaking antitrust laws by boosting electricity prices through their investments.

In a report, Jordan’s committee specifically criticized financial environmental alliances, saying they have created what it calls “a climate cartel.” NZBA is part of the Glasgow Financial Alliance for Net Zero, which was launched ahead of a key climate summit in Scotland in 2021. Back then, the world’s biggest lenders, including JPMorgan Chase & Co. and Citigroup Inc., joined the coalition.

Texas Attorney General Ken Paxton said in a statement that Wells Fargo’s withdrawal from NZBA was linked to his office’s review of the bank’s “status as a potential boycotter of energy companies.”

“I urge other financial institutions to follow their example and end ESG (environmental, social and governance) policies that are hostile to our critical oil and gas industries” Paxton said.

Wells Fargo’s decision was based on the company’s internal analysis, said a person familiar with the matter who declined to be identified.

A spokesman for NZBA said in a statement that Wells Fargo’s departure was “based on its own individual circumstances.” He added that five banks have left the group since it started in 2021, while more than 100 have joined. NZBA’s member banks have made “significant progress” in setting net zero targets, he said.

Wells Fargo is one of the largest financiers for the fossil-fuel industry. It ranks as the second-leading arranger of bonds and loans for oil, gas and coal companies since the start of the decade, according to data compiled by Bloomberg. JPMorgan is first.

Banks and money managers have been defecting from other climate groups in increasing numbers amid GOP-led pressure. This month, Franklin Templeton said it was leaving Climate Action 100+, which was created to press high-polluting companies to curb their emissions. The investment firm two years ago hired Anne Simpson, who was the first chair of CA100+, as its global head of sustainability.

(The NZBA is part of the Glasgow Financial Alliance for Net Zero, which is co-chaired by Mark Carney, who is chair of Bloomberg Inc. and a former Bank of England governor, and Michael R. Bloomberg, the founder of Bloomberg News parent Bloomberg LP.)

Photo: Photographer: David Paul Morris/Bloomberg