Zinger Key Points
- Bank of America and Citigroup left the Net-Zero Banking Alliance, joining Goldman Sachs and Wells Fargo in exiting the climate initiative.
- Republican pressure and Trump's pro-energy policies push banks to prioritize traditional energy lending over climate-focused pledges.
Bank of America Corp BAC and Citigroup Inc C became today the latest banks to end association with the climate alliance for banks.
Goldman Sachs Group, Inc GS and Wells Fargo & Co WFC already exited from Net-Zero Banking Alliance, the Financial Times reports.
The initiative focused on containing global warming by limiting investment in industries contributing to greenhouse gas emissions.
Citi told the Financial Times it remained committed to its climate goals and planned to channel its efforts toward emerging markets.
BofA told the Financial Times it would collaborate with clients to accomplish climate targets.
Republican lawmakers urged U.S. banks and other large companies to avoid pledges that would prompt them to lend less to the oil and gas industry or other traditional energy producers. That pressure intensified after Donald Trump’s presidential win.
The Trump administration plans to increase energy production by three million barrels of oil equivalent per day, impose a potential 25% tariff on Canadian oil and gas imports, and fast-track approvals for liquefied natural gas (LNG) exports.
Analysts remain divided over the impact of Trump’s victory on the clean energy sector.
JPMorgan’s Anthony Elian expects Trump’s policies to boost regional banks by encouraging lending, easing regulations and lowering corporate taxes.
Investors anticipate benefits for smaller, U.S.-focused institutions, driving surges in regional bank stocks and broader small-cap markets.
Carl Fleming of McDermott Will & Emery predicts a Trump administration could slow clean energy growth by cutting federal budgets and restricting offshore wind leases.
Fleming believes these actions would have a limited impact on the broader renewables market, which relies less on federal funding.
Morgan Stanley downgraded clean tech stocks, including SolarEdge Technologies, Inc SEDG, citing competition, tariff concerns, and uncertainty about the Inflation Reduction Act (IRA).
BAC, C Price Actions: At publication Thursday, Bank of America stock is up 0.78% at $44.33, Citibank is up 0.28% at $70.60.
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