JP Morgan joins exodus from climate group

JP Morgan announced Tuesday it is leaving the Net-Zero Banking Alliance, joining other financial institutions under review by the Texas attorney general over their membership in the climate group to withdraw from the organization in recent weeks.

Wells Fargo left the group last month and was cleared by Texas on Dec. 20 to continue to do business with the state and its local governments, including underwriting municipal bonds.

Bank of America and Morgan Stanley followed suit last week, but there has been no announcement by Attorney General Ken Paxton on their review status. His office did not immediately respond on Tuesday for a comment on JP Morgan’s move.

In October 2023, Paxton put the four banks, as well as Barclays and RBC Capital Markets, and other financial firms, under review over their involvement with the Net-Zero alliance, which seeks a transition to net-zero greenhouse gas emissions by 2050.

The move was in conjunction with a 2021 Texas law prohibiting state and local government contracts worth $100,000 or more with entities that “boycott” the fossil fuel industry.

In January 2024 Paxton’s office banned Barclays, saying the bank declined to respond to questions about its environmental, social, and governance commitments.

A JP Morgan spokesperson said the bank “will continue to work independently to advance the interests of our firm, our shareholders and our clients and remain focused on pragmatic solutions to help further low-carbon technologies while advancing energy security.”

“We will also continue to support the banking and investment needs of our clients who are engaged in energy transition and in decarbonizing different sectors of the economy,” the statement added. “At this time, we plan to continue engaging with (Glasgow Financial Alliance for Net Zero), among others, to advance pragmatic solutions and market conditions that can help further a low-carbon and energy-secure future.”

Like Wells Fargo, BofA, and Morgan Stanley, JP Morgan has underwritten municipal bonds in Texas while under review. It led deals for Dallas, Austin, San Antonio, and other issuers last year.

The constitutionality of the 2021 law is being challenged by a business group, which in August filed a lawsuit in federal court against Paxton and Texas Comptroller Glenn Hegar, who have asked the court to dismiss the case.