Congressional Democrats criticise banks for exiting climate coalitions

May 23, 2025

A group of forty Congressional Democrats have written to the CEOs of financial institutions that have recently withdrawn from previous climate change commitments, criticising the move.

In their letter to companies such as JP Morgan Chase, BlackRock, and Goldman Sachs, lawmakers criticised them for pulling out of several global coalitions dedicated to combatting climate change.

They emphasised that the decision is particularly troubling given the worsening effects of climate change in the US, noting that 2024 was the hottest year on record and saw a rise in the frequency and severity of natural disasters, resulting in billions of dollars in damage.

“Ignoring climate change’s destabilising effects on the economy is not an option,” wrote the lawmakers. “It bears repeating that climate risk is financial risk, a fact acknowledged by investors, asset managers, businesses, and regulators, including many of your organisations.”

The lawmakers also warned that ignoring climate commitments will heighten financial risks, which in turn could directly influence how investors choose to allocate their capital.

The letter added: “Financial institutions contribute to the emissions of nearly every business sector, making your organisation a crucial player in limiting the average global temperature rise and seizing the economic opportunities presented by the transition to a low-carbon economy,”

“Moreover, as top financiers of fossil fuels, a failure to address financed emissions could expose banks to long-term climate impacts, including the risk of stranded assets.”

However, pressure on financial companies to reaffirm their climate commitments isn’t coming from lawmakers alone as shareholders are also demanding action.

For example, a ‘Say on Climate’ proposal was presented at the annual general meetings of all six major Canadian banks. The Mouvement d’éducation et de défense des actionnaires called on the banks to adopt an annual advisory vote on their environmental and climate action plans and objectives, aiming to ensure greater accountability.

In Finland, Nordea Bank also received a proposal requesting it to amend its Articles of Association to prohibit fossil fuel financing for companies without a credible transition plan aligned with the Paris Agreement.

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