Wells Fargo announced it is ditching its plans to achieve net zero in a key area by 2050. The move comes after the banking giant left the Net Zero Banking Alliance in winter along with the other five biggest American banks.
What's happening?
In February, Wells Fargo said in a statement it no longer intends to work toward net zero — that is, removing as much pollution from the atmosphere as it contributes — for financed emissions (associated with its lending and investment activities). It is also scrapping its 2030 sector-specific interim financed emissions targets.
"When we set our financed emissions goal and targets, we said that achieving them was dependent on many factors outside our control. … Many of the conditions necessary to facilitate our clients' transitions have not occurred," the bank wrote, citing "public policy, consumer behavior, and technology changes."
"We are adjusting our approach to focus on doing what banks do best — providing financing and expertise to help clients pursue their own objectives," Wells Fargo added.
Why is this important?
Wells Fargo's withdrawal from the net-zero pledge suggests a renewed interest in backing a dirty energy sector generating the vast majority of harmful pollution entering our air.
While the bank has "committed, advised, or facilitated" $178 billion toward sustainable finance activities over the last three years, including renewable energy and clean transportation, according to its website, it also says that it had around $55 billion in outstanding commitments to oil, gas, and pipeline industries at the end of 2024.
A joint study from Harvard University, the University of Birmingham, University College London, and the University of Leicester linked exposure to fine particulate matter from dirty fuels to around one in five deaths in 2018. More than a century of scientific evidence also indicates that dirty fuels are the primary cause of Earth's disruptive overheating, as NASA explains.
"Wells Fargo's decision to abandon its net-zero targets is an outrageous abdication of responsibility," Sierra Club Director Ben Cushing said to Reuters.
"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," Reclaim Finance senior analyst Paddy McCully added.
What can be done about this?
Even though it is ditching some of its eco-friendly goals, Wells Fargo said it will maintain its 2030 and 2050 commitments to reducing operational pollution, including by "meeting 100% of our annual purchased electricity consumption needs with new renewable sources."
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Wells Fargo didn't close the door on renewing its net-zero financed commitment, writing: "We will continue to serve clients' energy needs, meeting them where they are in their chosen energy and transition strategies. And we will work to meet the rising energy demands of the clients, customers, and communities we serve."
You can support a cleaner financing future by advocating for eco-friendly policymaking and investing in green companies and technologies. Educating yourself about greenwashing can also help you recognize when a company isn't as planet-friendly as it appears to be.
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