Amidst raging wildfires in Los Angeles, JPMorgan Chase became the latest major US bank to withdraw from the Net Zero Banking Alliance (NZBA). This exodus of six American banks since early December signals a seismic shift away from climate commitments made following the Paris Agreement.The NZBA, part of the Glasgow Financial Alliance for Net Zero (GFANZ), comprises global banks pledging to align lending and investment portfolios with net zero emissions by 2050. New members must submit science-based targets within 18 months and regularly disclose progress.

However, this voluntary alliance faces a political headwind. The banks’ departures coincide with Donald Trump’s re-election, underscoring mounting pressure to backtrack on environmental pledges. Experts warn this trend could derail crucial efforts to decarbonize the financial sector and mitigate climate risks.

“The scope of the NZBA may have been limited, but the exodus signifies a concerning reversal of sustainability commitments made by major financial institutions,” said Adrienne Buller, director at The Break Down. “As wildfires rage, it’s a stark reminder of the urgent need for robust climate action across all sectors, including banking.”

While some view the NZBA as symbolic, its disintegration reflects deepening political polarization over environmental policies. Failure to uphold net zero pledges could impede global progress on emissions reductions and exacerbate the devastating impacts of climate change.