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Bank of America and Morgan Stanley, whose participation in the Net Zero Banking Alliance is under review by the Texas attorney general, withdrew from the organization this week.
Their departure from the group follows that of Wells Fargo, which was granted permission by the state of Texas on Dec. 20 to continue doing business with state and local governments, including underwriting municipal bonds. It was done.
In October 2023, Texas Attorney General Ken Paxton announced that the three banks, Barclays, JPMorgan, RBC Capital Markets, and other financial institutions were involved in the Net Zero Alliance, which aims to transition to net zero. The company was subject to review. Reduce greenhouse gas emissions to zero by 2050.
The move was in conjunction with a 2021 Texas law that bans state and local contracts worth more than $100,000 with groups that “boycott” the fossil fuel industry.
There was no immediate response from the attorney general’s office regarding the status of BofA and Morgan Stanley’s departure from the climate group.
Morgan Stanley said its decision to withdraw from the partnership “remains committed to net zero.”
“We aim to contribute to the decarbonization of the real economy by providing our clients with the advice and finance they need to transform their business models and reduce their carbon intensity,” the bank said in a statement. . “We will continue to report on our progress as we work towards our 2030 interim funded emissions target.”
“We continue to work with our customers on this issue and address their needs,” BofA said in a statement.
Mr Paxton’s office banned Barclays from doing business in January 2024, citing the company’s failure to respond to questions about its environmental, social and governance practices.
Like Wells Fargo, BofA and Morgan Stanley are also participating in the Texas bond deal under review. BofA led the $1.568 billion Texas Water Development Commission bond sale in September. Morgan Stanley served as co-senior underwriter for the $696 million Texas Transportation Commission general obligation redemption bond issue last year.
In August, business groups filed a lawsuit in federal court against the city of Paxton and Texas State Comptroller Glenn Hegar over the constitutionality of the 2021 law, and filed a motion to dismiss the lawsuit.
