How a Second Trump Presidency Could Undermine Climate Finance: The Guardian’s Insights

Earlier this month, Europe faced a shocking heatwave, and wildfires in the US produced “fire clouds.” Amidst this, Barclays announced it was leaving the net-zero banking alliance, which suggests a troubling shift in financial commitments to climate action.

This alliance is part of the Glasgow Finance Alliance for Net Zero (GFANZ), launched in 2021 by Mark Carney, who was then the UN’s climate envoy. It aimed to unite banks in reaching the Paris Agreement goals. At the time, it felt like a significant step forward. Carney even called it a “breakthrough.”

However, political changes altered this landscape. The election of Donald Trump shifted focus away from climate issues. His administration openly challenged environmental regulations and promoted fossil fuels. Reports show that fossil fuel companies contributed $19 million to Trump’s inauguration fund, a move that has proven advantageous for their interests. Since then, Trump has retracted the US from the Paris Agreement and initiated policies that favor fossil fuel extraction over renewable energy.

This climate retreat is reflected in the actions of major banks. Barclays is now the second British bank to exit the net-zero alliance, following HSBC’s similar move earlier this year. Notably, six large US banks had already withdrawn just before Trump took office. Institutions like BlackRock also faced backlash for their commitment to environmental goals. After being sued by Republican groups, BlackRock distanced itself from the net-zero asset managers initiative. This change is stark, considering that BlackRock’s chairman, Larry Fink, had emphasized climate change in past investor letters, but his 2025 letter didn’t mention it at all.

The unraveling of GFANZ highlights a significant flaw in relying on businesses for climate action. The initiative’s goals were vague, encouraging banks to invest in low-carbon sectors but not mandating firm limits on fossil fuel financing. In a time of increased pressure from political groups, GFANZ has moved away from its initial mission, now welcoming members without firm net-zero commitments. Though it was never meant to replace government action, inactive governments have embraced it. Boris Johnson, the UK Prime Minister when it launched, promised it would help “build back greener.”

Research shows that many green finance initiatives prioritize minimizing investment risks rather than truly addressing climate change. As Adrienne Buller notes, “green ethical investing” is often more about betting on a cleaner economy than creating one.

The main takeaway here is clear: governmental action is crucial in tackling the climate crisis. Effective steps include restricting fossil fuel extraction, imposing carbon taxes, promoting renewable energy, and confronting influential industries. Reliance on businesses to self-regulate has led to dangerous delays in meaningful climate action.

With trends shifting, public concern for climate action is growing. Recent surveys indicate that a significant portion of Americans supports stricter regulations to address climate change. Only with strong government policies can we hope to see real progress in combating this pressing issue. More information on the impacts of climate policies can be found in this report from the United Nations.

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