(Reuters) – Wells Fargo is scrapping its goal of achieving net-zero emissions across its financed portfolio by 2050 as banks rethink their sustainable lending activities.
The goals had relied on many factors “outside our control” such as public policy, consumer behavior and technological advancements that would help clients transition to greener business practices, the bank said on Friday.
“Many of the conditions necessary to facilitate our clients’ transitions have not occurred,” it added.
The move underscores how the financial industry is re-evaluating its environmental, social and governance (ESG) commitments as political sentiment in Washington shifts.
Since taking office, President Donald Trump has withdrawn from the Paris Agreement and severed international partnerships on climate, including halting the participation of U.S. scientists in the Intergovernmental Panel on Climate Change, which is meeting in China this week.
The raging debate on sustainability has at times put financial heavyweights in the crosshairs. BlackRock CEO Larry Fink, a longtime advocate of ESG principles, said in 2023 he had stopped using the term because it had become “weaponised”.
Wells Fargo is also abandoning its sector-specific interim financed emissions targets for 2030. It will, however, continue to pursue its 2030 operational sustainability goals and its 2050 target for its own operational emissions.
“Wells Fargo’s decision to abandon its net-zero targets is an outrageous abdication of responsibility,” said Ben Cushing, director of leading environmental group Sierra Club’s sustainable finance campaign.
In December, the lender had also quit the Net-Zero Banking Alliance — a group of global banks committed to curbing greenhouse gas emissions.
“At a time when financial institutions should be leading on climate, Wells Fargo is instead putting the economy, its shareholders, and the planet at greater risk,” said Paddy McCully, senior analyst at Reclaim Finance.
(Reporting by Niket Nishant in Bengaluru and Saeed Azhar in New York)
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