UK Guardian editorial excerpt: Earlier this month, as Nordic countries were hit with an unprecedented heatwave and wildfires in the US began spurting “fire clouds”, Barclays pulled out of the net zero banking alliance. The story may have seemed less alarming than extreme weather, but it has existential implications, as the finance sector quietly surrenders its former climate commitments.
The initiative forms part of the Glasgow Finance Alliance for Net Zero (GFANZ), a voluntary network of banks that Mark Carney, formerly the UN’s special envoy on climate action and now Canada’s prime minister, launched in 2021. At the time, the alliance, which encourages banks and asset managers to work towards the goals of the Paris agreement, seemed like an optimistic step in the right direction. Mr Carney described it as a “breakthrough”.
But times change. The election of Donald Trump, whose advisers have waged war on “climate fanaticism” and “woke” capitalism, has created an environment of impunity where businesses no longer need to even pay lip service to progress. Fossil fuel companies donated $19m to Mr Trump’s inauguration fund. So far, their investment has paid off. Mr Trump has withdrawn from the Paris agreement, used an “invented” energy emergency to justify the expansion of fossil fuels, opened public lands to drilling, and plans to cut funding for renewable energy.
With America reneging on climate action, businesses may feel they can relax. Barclays is the second British bank to leave the net zero alliance after HSBC quit earlier this year. Six of the largest US banks quit just weeks before Mr Trump’s inauguration. Some institutions have come under direct pressure from the right: BlackRock left the net zero asset managers initiative, another GFANZ group, after it was sued by Republicans who claimed its promotion of environmental, social and governance (ESG) goals had cut coal production. In each of his annual investor letters from 2020 to 2024, BlackRock’s chair, Larry Fink, namechecked climate change. His 2025 letter made no mention of it.
The deterioration of GFANZ reveals the weaknesses in relying on businesses to do the right thing.
