SMFG Withdraws from Net-Zero Alliance Amid Climate Skepticism

Sumitomo Mitsui Financial Group Withdraws from Net-Zero Banking Alliance

Sumitomo Mitsui Financial Group Inc. (SMFG), one of Japan's largest financial institutions, has withdrawn from the Net-Zero Banking Alliance (NZBA), a global initiative aimed at achieving net-zero greenhouse gas emissions in lending and investment portfolios by 2050. This decision comes amidst rising climate change skepticism under the second Trump administration.

SMFG's withdrawal follows a similar trend among U.S. financial institutions, including Goldman Sachs, Citigroup Inc., and JPMorgan Chase & Co. These withdrawals have been fueled by criticism from some members of the U.S. Republican Party who argue that banks collectively restricting investments and loans to the fossil fuel industry could violate antitrust laws.

Despite its withdrawal from the NZBA, SMFG has emphasized that its commitment to climate action remains unchanged. Other Japanese financial institutions, such as Sumitomo Mitsui Trust Group Inc., Norinchukin Bank, and Nomura Holdings Inc., remain members of the alliance. Norinchukin Bank is currently discussing its plans regarding the NZBA.

The NZBA was established in 2021 and comprises over 130 financial institutions worldwide. Its goal is to align lending and investment portfolios with net-zero emissions by 2050. However, the return of climate change skeptic Donald Trump to the White House has cast doubt on the future of the initiative in the United States.