In early July, a small group of climate protesters logged onto a Zoom meeting with Citibank's top sustainability executives, their emotions ranging from cautious optimism to guarded skepticism. These activists, part of groups like Stop the Money Pipeline and Planet Over Profit, had been pressuring the bank for weeks as part of their "Summer of Heat on Wall Street" campaign. After facing arrests and confrontations during their protests, Citi's invitation to discuss their role in the climate crisis was a welcome opportunity. However, the meeting only highlighted the widening gap between Wall Street's climate promises and its actual actions.
When asked to stop financing new liquified-natural-gas (LNG) terminals—projects deemed "carbon bombs" by activists—Citi's executives refused to discuss their current projects. This refusal underscored a larger issue: Wall Street's recent backsliding on its climate ambitions. Despite pledges made in 2020 and 2021 to reduce carbon footprints and push towards net-zero emissions, major financial institutions are retreating from those commitments.
This shift is largely driven by political and financial pressures. Facing criticism from Republican politicians accusing them of "woke" capitalism, and with the oil and gas industry still offering high returns, Wall Street firms are finding it challenging to maintain their climate pledges. The energy crisis triggered by Russia's war in Ukraine, which led to soaring gas prices and record profits for oil and gas companies, has further complicated matters.
While firms like Citi and BlackRock have made significant investments in climate solutions, they are increasingly reluctant to phase out financing for fossil fuels. Banks argue that without stronger government policies to reduce fossil fuel demand, their ability to drive change is limited. As a result, climate activists accuse Wall Street of prioritizing short-term profits over long-term sustainability.
Some financial institutions have even scaled back their climate commitments. For example, BlackRock appointed Saudi Aramco CEO Amin Nasser to its board and emphasized "energy pragmatism," suggesting that both renewable energy and fossil fuels are necessary. Meanwhile, JPMorgan CEO Jamie Dimon has criticized the push to stop oil and gas projects as "enormously naive," signaling a retreat from the bank's earlier climate goals.
Despite these setbacks, there are some signs that Wall Street might be reassessing its approach. Reports indicate that the world's largest banks provided fewer loans and financial services to the fossil fuel industry in 2022 and 2023. However, climate advocates remain skeptical, noting that oil and gas companies, flush with cash, have had less need for financing. They warn that without stricter policies, banks may ramp up fossil fuel financing again when demand returns.
As the world continues to face the devastating impacts of climate change—such as record-breaking heat waves, wildfires, and extreme weather events—Wall Street's role in financing fossil fuels becomes increasingly paradoxical. The financial risks of climate inaction are mounting, threatening long-term economic stability. Yet, without stronger government intervention, Wall Street's cycle of promise-making and backtracking on climate commitments is likely to continue, putting the planet's future at greater risk.
@Jasikaran Vickneswaramoothy is a legal reporter for the Swiss Financial Times.
