TEMPERATURE CHECK — We’re taking a look at where things stand with efforts to get Wall Street to help drive the green transition as President-elect Donald Trump prepares to wage war on climate progress, and we’re getting mixed signals, your host reports. Several of the nation’s biggest banks marked the arrival of the new year by bailing on a coalition created to align them on efforts to cut greenhouse gas emissions. Those moves came amid a larger reorganization of the Glasgow Financial Alliance for Net Zero — a broader group including banks, asset managers and insurers — which eliminated a requirement that companies commit to reaching net-zero emissions by 2050 to qualify for membership. The departures from the Net-Zero Banking Alliance and the GFANZ reset are the latest reflections of the complications that financial giants face in trying to juggle business and social demands in a volatile political environment where they’re facing climate policy backlash in the U.S. while Europe rolls out tougher rules. “It's no question that developments on either side of the Atlantic have required GFANZ to kick its work into high gear to move it forward,” a GFANZ spokesperson granted anonymity to discuss internal matters said in an interview. “Despite the political winds shifting, the long arc is still clear that this is an enormous opportunity.” GFANZ, which is led by financial industry luminaries Mark Carney and Michael Bloomberg, was launched under U.N. auspices in 2021 when President Joe Biden’s administration was looking to make good on his promise to spearhead the fight against climate change. It was a fragile endeavor from the start, with green groups questioning the coalition’s substantive impact on cutting fossil fuel financing and Republicans accusing Democrats of politicizing finance. Anti-ESG Republicans are cheering the reorganization, taking it as a sign that the political and legal threats they’ve hammered since the beginning of the GFANZ project are resonating. “What happens is certain groups, because they're frustrated they can't get certain policies through elected officials, they resort to other things like this, and while it's trendy and maybe well-received by certain consumers and customers, once the consumers and customers begin to change their minds, out of self-protection, the companies change their policies,” said Louisiana Treasurer John Fleming, who previously served as Trump’s deputy chief of staff and has launched a 2026 Senate run. Advocates for aggressive climate policy, meanwhile, are expressing dismay over the GFANZ move, viewing it as the latest in a series of setbacks including weaker-than-expected rules from the U.S. Securities and Exchange Commission and the apparent slow-walking of California’s landmark statutes. “It’s a pretty stunning turn of events,” said Graham Steele, who left his post as assistant secretary for financial institutions at the Treasury Department last year. “It is a very clarifying moment in that it tests how much of this was driven by an individual commitment on the part of the banks, and how much was driven by broader societal and political pressure to really acknowledge and address climate change.” Still, blue-state politicians and activists are preparing to fight back. New York state Sen. Brad Hoylman-Sigal said he’s going to “supercharge” his push for a corporate climate disclosure measure, similar to one adopted in California, that would require all large companies to disclose their planet-warming emissions, including “Scope 3” pollution from financing and lending activities. Activists in New York like Vanessa Fajans-Turner, executive director of Environmental Advocates NY want to go further, pushing for a prohibition on lending for new fossil fuel projects, and requiring banks to mandate climate transition plans from borrowers and disclose lobbying on climate policies. While advocates for climate action express worry that the reorganization could just be cover for companies looking to bail on their previous pledges, Columbia Center on Sustainable Investment Director Lisa Sachs said it could instead pave the way for correcting a fundamental misunderstanding of the capabilities of the finance sector. “Undoubtedly finance needs to be at the table, but they're not going to lead the energy transition. It is not what the finance sector does,” Sachs said, expressing cautious optimism that the new orientation of GFANZ might create opportunities to engage the industry in “real problem-solving” to help determine how to mobilize finance in the “geographies where it’s needed.
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