Global financial sector dropping key green pledges as Trump takes office |

The second Trump administration is expected to strike a blow to efforts to align the global financial sector with the path to net zero, with banks, asset managers and industry groups already moving to accommodate the incoming president’s avowed policy of “drill, baby, drill”.

As authorities declared 2024 the hottest on record, atmospheric carbon dioxide leapt by a record amount and fires ravaged Los Angeles, a key private sector climate alliance, the Glasgow Financial Alliance for Net Zero (GFANZ) abandoned a requirement that members be aligned to the Paris agreement.

That was followed by a network of net zero asset managers suspending work, and deleting from its website its statement of commitments that members must adopt, after BlackRock, the biggest of them all, quit its ranks.

As Trump takes office with an agenda of reversing US green policies, seen as part of a “woke” agenda at which he and his followers have taken aim, analysts and observers expect that worse is yet to come.

“Honestly, even if you look at politics around the world, it feels like the populist right is pushing hard on an anti-net zero ticket,” said James Alexander, the chief executive at the UK Sustainable Investment and Finance Association. “It is particularly disheartening to see this news come right at the time of, you know, the worst wildfires we’ve ever seen in Los Angeles, floods across the world, heat waves, and right on the eve of Donald Trump’s inauguration.

“The inauguration doesn’t look like a coincidence. And it’s really disappointing to see that this is the effect that … political attacks are having on the commitments of institutions to these alliances.”

Launched with fanfare at Cop26 in Scotland three years ago, GFANZ was intended to be a sector-wide collaboration to “mobilise the trillions of dollars necessary to … deliver the goals of the Paris agreement”.

At the time, Mark Carney, the UK government’s climate finance adviser for Cop26, said: “This is the breakthrough in mainstreaming climate finance the world needs.” He became chair of the new groups, which he said would be “the gold standard for net zero commitments in the financial sector”.

But on the eve of the new year, Carney announced a major revision to those commitments, as GFANZ in effect dropped its requirement for members’ activities to be aligned with Paris, amid a drip-drip exodus of major US banks – the six biggest of which have quit the banking industry’s net zero group since December.

But Andrew Garraway, the head of climate policy at climate analytics firm Risilience, said: “It would be wrong to ascribe the difficulties at GFANZ and the sectoral alliances solely to Trump, as they’ve faced increasing Republican resistance since their establishment in 2021.

“However, the Trump presidency is indeed the catalyst for many US financial firms stepping back from GFANZ and the sectoral alliances, with firms nervous of the potential political and legal…