Wells Fargo has announced its withdrawal from the Net-Zero Banking Alliance (NZBA), following a review initiated by Texas Attorney General Ken Paxton. The NZBA is described as an organization that requires members to adopt climate-focused policies, which some critics argue may conflict with consumer and investor interests.
The decision by Wells Fargo comes after Paxton's examination of the bank's involvement in potential boycotting of energy companies. Under Texas law, financial institutions identified as boycotting the oil and gas industries cannot enter into contracts with state governmental entities. With Wells Fargo's exit from the NZBA, Texas will cease its review, allowing state entities to engage in business with the bank.
In October 2023, Paxton began reviewing Wells Fargo and other financial institutions in relation to Senate Bill 13. This legislation prohibits government contracts with companies that boycott oil and gas industries. At that time, Wells Fargo's participation in the NZBA suggested it might be classified under this category according to state law.
Attorney General Paxton expressed approval of Wells Fargo's decision: “This is great news for Texas. On August 21, I strongly encouraged that Wells Fargo leave Net-Zero Banking Alliance due to its unlawful ESG commitments. On December 19, Wells Fargo confirmed that they would leave NZBA because of my request,” he stated. “Today, Wells Fargo took a step in the right direction by officially ending their affiliation with NZBA, and Texas welcomes them to continue doing business with our great State. I urge other financial institutions to follow their example and end ESG policies that are hostile to our critical oil and gas industries.”