Wells Fargo drops net zero target in ‘cowardly and shortsighted’ move

Wells Fargo is the first US bank to abandon its net zero target for financed emissions amid the Trump administration’s anti-ESG politics. The move has been called “cowardly and shortsighted” by NGOs.

Wells Fargo announced last week that it was “discontinuing” its sector-specific interim financed emissions targets for 2030 and its goal to achieve net zero by 2050 for financed emissions – arguing that “many of the conditions necessary to facilitate our clients’ transitions have not occurred”.

All traces of the interim targets Wells Fargo had set for polluting sectors in its portfolio have been removed from the bank’s website, but these included a 26% reduction in absolute oil and gas emissions and a 60% reduction in emissions intensity for the power sector.

Wells Fargo is the fifth-largest fossil fuel financier of the last eight years, and on December 31, 2024, the bank had approximately US$55 billion of outstanding commitments to oil, gas, pipeline companies, and utilities.

“We are adjusting our approach to focus on doing what banks do best – providing financing and expertise to help clients pursue their own objectives,” the bank said last week.

Banks’ retreat from climate action – and sustainability leaders’ exit from their roles

The move comes after six major US banks (including Wells Fargo), four Canadian banks and one Australian bank exited the UN-convened Net Zero Banking Alliance (NZBA) at the end of last year – shortly after Donald Trump’s election as President. 

While they remain in the NZBA, other global banks have also signalled a retreat from climate priorities: HSBC, for example, recently delayed its operational net zero target by 20 years after demoting its Chief Sustainability Officer from the executive committee.

This retreat has been associated with a wave of sustainability leaders leaving top roles at financial institutions: HSBC CSO Celine Herweijer left at the end of 2024, and Barclays’ Head of Sustainability Laura Barlow has stepped down without being replaced.

Wells Fargo also lost its Chief Sustainability Officer Robyn Luhning in August 2024 amid rumours that she was disappointed by the bank’s lack of commitment to climate action. With her departure, the bank got rid of the CSO position, and gave the helm of the sustainability team to Jeffrey Schub as Head of Sustainability.

Reactions to Wells Fargo target announcement

Wells Fargo’s move has been harshly criticised by NGOs and activist investors. Ben Cushing, director of the Sierra Club’s Sustainable Finance campaign, called it “an outrageous abdication of responsibility”. “Instead of using its significant influence to drive the energy transition and address the climate crisis, the bank is hiding behind the excuse that it can only passively follow its clients’ actions. As the world’s fifth-largest financier of fossil fuels since the Paris Agreement, Wells Fargo has actively fueled the climate crisis while now attempting to shift the blame onto everyone else. This retreat is both cowardly and shortsighted,” he added.

Danielle Fugere, President and Chief Counsel of As You Sow, a shareholder representative pushing for more climate commitment from listed companies, warned that “investors expect banks to mitigate risk, not accelerate it”.

As You Sow CEO Andrew Behar advised any other financial institution considering abandoning their emissions targets to reconsider: “Investors are concerned about this shift, especially fiduciaries with a duty to protect their beneficiaries from the growing likelihood of declining financial returns associated with climate change.”