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morgan stanley
Morgan Stanley Latest Wall Street Giant to Ditch Net-Zero Coalition
Earlier this week, Bank of America and Citigroup also said they were leaving the Net-Zero Banking Alliance.
Jan 02, 2025
On Thursday, the Wall Street titan Morgan Stanley became the latest financial institution to leave the Net-Zero Banking Alliance, a United Nations-convened group of banks committed to "aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050."
The defections keep piling up. Earlier this week, Bank of America and Citigroup said they were leaving the alliance, and earlier in December Goldman Sachs Group and Wells Fargo announced they were doing the same.
“We will continue to report on our progress as we work towards our 2030 interim financed-emissions targets,” Morgan Stanley told Bloomberg in an email.
While Morgan Stanley didn't offer an explanation for the exit, according to Reuters, financial firms have repeatedly found themselves in the crosshairs of some members of the GOP who argue that corporate efforts to limit fossil fuels run afoul of antitrust law.
Last summer, the Republican members of the House Judiciary Committee published a report accusing financial institutions colluding to impose "radical environmental, social, and governance (ESG) goals on American companies." Their probe was largely focused on another climate group, Climate Action 100+, which is made up of financial institutions who strive to engage companies they invest in on climate issues. That coalition has also experienced a number of defections.
In December, 11 GOP-led states sued three asset managers in federal court, arguing that the firms had "artificially constrained the supply of coal, significantly diminished competition in the markets for coal, increased energy prices for American consumers, and produced cartel-level profits" for the firms in violation of antitrust law.
Despite the stated goals of the Net-Zero Banking Alliance, Morgan Stanley and other firms who are a part of the alliance have remained a major financial life lines for fossil fuel companies.
According to a report published by a group of NGOs in 2023, 56 of the largest banks in the Net-Zero Banking Alliance—including Morgan Stanley—have provided nearly $270 billion in the form of loans and underwriting to more than 100 "major fossil fuel expanders," from Saudi Aramco to ExxonMobil to Shell.
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Analysis Details How Wall Street Underwriting Quietly Funnels Billions Into Fossil Fuels
"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," said one campaigner.
Jul 24, 2023
A report out Monday sheds light on how big U.S. banks' underwriting of bonds and equities for polluting corporations constitutes a "hidden pipeline" for fossil fuel financing.
It's no secret that financial institutions play a leading role in driving the climate emergency. Since 2016, the year the Paris agreement took effect, the world's 60 largest private banks have provided more than $5.5 trillion in financing to the fossil fuel industry, flouting their pledges to put themselves and their clients on a path to net-zero greenhouse gas emissions as the window to avert the worst consequences of the intensifying climate crisis rapidly closes.
But banks' underwriting activities receive far less attention than their direct lending practices, even though both are instrumental in enabling fossil fuel expansion and must be reformed to rein in the industry most responsible for imperiling the planet's livability.
That's the key takeaway from a new analysis of Wall Street's participation in capital markets published by the Sierra Club's Fossil-Free Finance campaign.
"By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."
"Banks play a vital role in capital markets," the report explains. "Acting as underwriters, they are the gatekeepers of fossil fuel companies: they advise companies issuing bonds and equities, hold the vital information on the issuer, and help market the instruments to investors disclosing only the necessary risk."
Since 2016, the six largest U.S. banks—JPMorgan Chase, Citi, Wells Fargo, Bank of America, Morgan Stanley, and Goldman Sachs—have provided more than $433 billion in lending and underwriting to 30 of the companies doing the most to increase fossil fuel extraction and combustion worldwide, the report notes. More than three-fifths (61%) of that financing comes from underwriting, with those half-dozen banking giants issuing $266 billion in new bonds and equities for the world's top 30 fossil fuel expansion firms.
Climate justice advocates have long criticized the concept of "net-zero" because, they argue, allowing planet-heating pollution to be "canceled out" via dubious carbon offset programs or risky carbon removal technologies is an accounting trick that doesn't guarantee the significant emissions cuts needed to avoid the climate emergency's most destructive impacts.
But even if one accepts the premise of net-zero, big U.S. banks' policies on the topic are misleading.
"Despite the importance of capital markets activities in helping fossil fuel companies secure new funding, banks focus primarily on lending, while downplaying the importance of underwriting, when setting their emissions reduction targets," the report says. "Banks are performing sleight of hand, distracting investors and regulators with net-zero transition plans that are half-finished, while continuing to funnel money to fossil fuel companies via capital markets with limited scrutiny."
In a statement, Adele Shraiman, senior campaign strategist with the Sierra Club's Fossil-Free Finance campaign, said that "without banks, fossil fuel companies cannot raise money through capital markets."
"By downplaying their role in capital markets and refusing to include facilitated emissions in their climate targets, big U.S. banks are intentionally sidestepping a major source of real-world emissions and making it impossible to meet their own net-zero commitments," said Shraiman.
According to the report: "Only three of the six major Wall Street banks include bond and equity underwriting in their sectoral emissions reduction targets—JPMorgan Chase, Goldman Sachs, and Wells Fargo. The remaining three banks have so far chosen to only apply emissions reduction targets to lending activities."
However, "even among those who have set emissions reduction targets that include underwriting, insufficient disclosures and lack of standardization make it difficult to understand how robust banks' facilitated emissions accounting methodologies are, and what progress they are making toward achieving their emissions reduction targets," the report adds.
In a blog post, Shraiman wrote that "banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate and hurting communities."
"But investors, regulators, and customers around the world see through their duplicity," she continued. "We are demanding complete, robust, and transparent net-zero plans that cover all types of financing activities and will lead to real-world emissions reductions in line with our global climate goals."
"Banks don't want us to know all of the ways they help fossil fuel companies raise funds to continue building the pipelines, oil rigs, fracking wells, and coal mines that are destroying the climate."
Monday's report comes at a key moment in the fight to stop Wall Street from continuing to fund climate chaos.
As the Sierra Club observed, "Banks currently point to a lack of industry standards on underwriting to justify why they do not disclose or set targets for facilitated emissions." However, the industry-led Partnership for Carbon Accounting Financials is expected to release its updated methodology on accounting for and reducing facilitated emissions in the near future.
"Underwriting is a huge missing piece of net-zero transition plans, allowing big U.S. banks to continue to help fossil fuel companies raise billions of dollars with limited scrutiny," Shraiman said. "By only focusing on emissions reduction targets for their lending activities, banks are conveniently excluding half of their fossil fuel financing from their climate commitments."
"It's time," she added, "for the major Wall Street banks to adopt a robust and consistent methodology for accounting facilitated emissions, and take full responsibility for the climate impacts of their underwriting decisions."
The International Energy Agency has stated unequivocally that there is "no need for investment in new fossil fuel supply in our net-zero pathway."
After the Intergovernmental Panel on Climate Change released its latest assessment in March, United Nations Secretary-General António Guterres said that limiting temperature rise to 1.5°C is possible, "but it will take a quantum leap in climate action," including a ban on approving and financing new coal, oil, and gas projects as well as a phaseout of existing fossil fuel production.
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Climate Coalition Targets Big Banks and Insurance Giants With New Shareholder Campaign
"The planet is running out of time and the banks are running out of excuses," said climate leader Bill McKibben.
Mar 01, 2023
A coalition of more than 240 advocacy groups on Wednesday launched a "Shareholder Showdown" campaign in support of shareholder resolutions urging climate action and respect for Indigenous rights at major U.S. and Canadian banks and insurance companies.
According to campaign coordinator Stop the Money Pipeline, the resolutions—which were filed by investors including the New York City and state pension funds, Sierra Club Foundation, and others—would require banks and insurance companies to "phase out their financing of companies engaged in fossil fuel expansion, report on projects that could violate Indigenous rights, use absolute emissions rather than emissions intensity targets, disclose 2030 transition plans, and hold directors accountable at banks that are not aligned with 1.5°C pathways."
The resolutions were timed to precede the companies' annual general meetings.
"This campaign is called Shareholder Showdown because we're in for a real fight—we're up against some globally powerful institutions," Arielle Swernoff, Stop the Money Pipeline's U.S. banks campaign manager, explained in an opinion piece published Wednesday by Common Dreams. "But organized people can achieve anything, and together we will stop the flow of money to fossil fuels and climate destruction."
\u201cToday we\u2019re launching our new campaign: #ShareholderShowdown! \n\nThis spring: banks + insurers will have their annual shareholder meetings, where they'll vote on resolutions needed to keep global warming below 1.5\u00b0C\u2026or decide to keep business as usual. \ud83d\udcb0\ud83d\udd25\n#StoptheMoneyPipeline\u201d— Stop the Money Pipeline (@Stop the Money Pipeline) 1677684715
Bill McKibben, co-founder of the climate group 350.org, said in a statement that "the planet is running out of time and the banks are running out of excuses—everyone from the pope to the secretary-general of the [United Nations] have called on them finally to act with clarity and conviction to help with the planet's greatest crisis, and shareholders should demand no less."
Among the resolutions filed are:
- An Indigenous rights reporting requirement filed by Sisters of St. Joseph for Peace at Citigroup;
- An absolute emissions target disclosure mandate filed by New York City Comptroller Brad Lander and three city pension systems at Bank of America, Goldman Sachs, JPMorgan Chase, and Royal Bank of Canada; and
- Measures filed by As You Sow requiring JP Morgan Chase, Bank of America, Wells Fargo, Goldman Sachs, and Morgan Stanley to publicly disclose their 2030 plans for transitioning lending and investment portfolios away from fossil fuels.
"Climate change is an existential crisis that can overwhelm a person in scale and size, impossible to address," said Tara Houska of the Giniw Collective, an Indigenous women and two-spirit-led frontline resistance group fighting fossil fuel projects like Line 3 in Minnesota.
"Big bank shareholders possess an enormous amount of influence on the world's emissions," Houska added. "A roomful of people can impact the disastrous course we are currently on. No more lip service or empty greenwashing—we need action, now."
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