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Morgan Stanley has quit Mark Carney’s net zero banking group, joining a broader Wall Street exodus as Donald Trump prepares to re-enter the White House.
The US banking giant, which employs 5,000 people in London, said it was leaving the Net-Zero Banking Alliance to pursue its own policies aimed at tackling climate change.
Morgan Stanley is the third US bank to quit the organisation this week, following the departures of Citigroup and Bank of America. Goldman Sachs and Wells Fargo had already quit the group.
The move coincides with the looming second presidential term of Donald Trump, who has promised to boost oil production and cut subsidies for green technology.
The exodus is a blow for Mark Carney, who spearheaded the creation of the alliance.
The Net-Zero Banking Alliance is a sub-group of Mr Carney’s Glasgow Financial Alliance for Net Zero (Gfanz), which was founded by the former governor of the Bank of England after Glasgow’s Cop26 conference in 2021.
The banking alliance was set up to encourage lenders to reduce greenhouse gas emissions and currently has 140 members, including Lloyds, HSBC, Barclays and NatWest.
While British lenders remain committed, Wall Street banks are increasingly dialling down environmental rhetoric amid political backlash in the US.
Last month Texas moved to sue BlackRock, Vanguard and State Street over allegations they breached competition rules with environmental, social and governance (ESG) investment policies intended to suppress the supply of coal.
Republican senator Marco Rubio, a former presidential candidate and Mr Trump’s pick for secretary of state, has also put pressure on Wall Street by attacking its “far-Left social and environmental agendas”.
Last year a climate change alliance focusing on fund managers, Climate Action 100+, experienced a similar mass exodus. JP Morgan Asset Management, State Street Global Advisors, Pimco and BlackRock all quit as members.
Gfanz is chaired by Mr Carney and billionaire media mogul Michael Bloomberg. The Net-Zero Banking Alliance is the banking element within the umbrella group.
In response to the defections, a Gfanz spokesman said: “To date, Gfanz has successfully worked to support greater levels of climate-related disclosure, the development and publication of climate transition plans, and the launch of initiatives to de-risk private investment going into emerging markets and developing economies.
“Without private finance, there can be no global energy transition. For that reason, in 2025 and beyond, Gfanz will redouble its efforts to mobilise private capital.”