Earlier, Franklin Templeton announced that it is quitting Climate Action 100+, an investor-led group formed to press companies to cut emissions
Goldman Sachs has left the Net Zero Banking Alliance (NZBA), a major climate group for banks, on Friday amid increasingly complex regulations. The decision was largely motivated by the need to comply with mandatory reporting guidelines, according sources cited in a Bloomberg report.
This comes at a time when there is a pressure from some Republican politicians, suggesting that membership of the NZBA could breach anti-trust rules. European Union’s corporate sustainability reporting directive has been also one of the reasons behind Goldman Sachs approach as per the source cited in the report.
"We have the capabilities to achieve our goals and to support the sustainability objectives of our clients. Goldman Sachs is also very focused on the increasingly elevated sustainability standards and reporting requirements imposed by regulators around the world," the company said in a statement on Friday.
"Our priorities remain to help our clients achieve their sustainability goals and to measure and report on our progress," it further said.
The report mentioned that it has been laying the groundwork for its departure from sometime. The clients and other stakeholders have been consulted before disclosing the move.
Earlier, Franklin Templeton announced that it is quitting Climate Action 100+, an investor-led group formed to press companies to cut emissions.
NZBA comes under the Glasgow Financial Alliance for net zero, a global coalition of leading financial institutions, which had announced a commitment of $130 trillion in COP26 climate summit held in Scotland in 2021. It is a group of leading global banks committed to aligning their lending, investment and capital markets activities with net-zero greenhouse gas emissions by 2050. Major banks like JPMorgan Chase & Co. and Citigroup Inc. became a member of the coalition.
Climate coalitions after a while started to face internal tensions as some of the members hesitated in committing to explicit financing requirements, as mentioned in the report. A collapse in green asset values followed.
Adapting to a lot of environment, social and governance requirements is making things difficult for firms. EU’s disclosure requirements are one of the most advanced and widest in scope. So, companies which are based outside EU and are targeting clients in the bloc, they need to observe EU rules.
BlackRock is among the investors being currently being sued by Texas and 10 other Republican-led states over alleged violations of anti-trust law.