Since Donald Trump's re-election, American companies have withdrawn from several climate initiatives. With Laurence Fink as CEO, BlackRock, the world's largest investor, is leaving the Net Zero Asset Managers Initiative (NZAM). Earlier, six of the largest American banks withdrew from a similar club, the Net-Zero Banking Alliance (NZBA). These developments have far-reaching consequences for global sustainability efforts. The question is whether European ESG regulations, including the CSRD, can still offer resilience despite these geopolitical changes.
This contribution will first clarify the background of the NZAM and NZBA, especially with regard to their objectives. Then the decision to withdraw from the groups will be discussed. Subsequently, the role of these American decisions with regards to Dutch companies in the context of ESG will be described. Finally, the possible future for sustainability will be discussed.
Background
The NZAM is an international group in which financial institutions voluntarily work together to tackle the climate crisis. The goal of this initiative is net zero greenhouse gas emissions by 2050 or earlier and limiting global warming to 1.5°C. Together with more than 300 financial market participants, BlackRock was one of the members of the NZAM. BlackRock was the largest asset manager in the world at the end of 2024 with 10.6 billion dollars in assets under management.
The NZBA pursues the same goal as the NZAM, but limits itself to obligations for global banks. In the Netherlands, Rabobank, ING, ABN AMRO and Triodos Bank are part of this alliance. The NBZA brings together banks to be climate neutral in their investments and loans by 2050. Both NZAM and NZBA support the goals of the Paris Agreement. Partly for that reason, their objectives are similar.
Preparing for Trump's presidency
The departure of American companies and banks from international climate initiatives marks a shift in the approach to sustainability. NOS reports that according to experts, BlackRock's decision to leave the NZAM is part of the preparation for Trump's presidency. The choice is said to be part of the so-called "Trump effect".
In addition, the growing pressure from American regulatory authorities has contributed to BlackRock's decision to withdraw. According to the FD, this political pressure is mainly exerted by conservative investors and politicians, who label climate policy as "woke".
Trump himself announced earlier this week that he is withdrawing the US from the Paris Climate Agreement. He has also declared himself a supporter of oil and gas production. This raises the question of how other countries will react if the largest economy in the world does not set climate targets for the coming years. In any case, it will not be an incentive for other countries to be ahead of the curve on climate policy themselves.
Influence on the Netherlands
In a statement, the American BlackRock emphasizes that the departure from the NZAM will not affect the management of client portfolios. However, the decision creates distrust among many financial participants. In the Netherlands there is also a response to the distancing.
According to the daily newspaper Trouw, PME, one of the five largest pension funds in the Netherlands, has announced in a letter that it is not happy with BlackRock's decision. PME is considering breaking off its relationship with BlackRock. Daan Spaargaren, the responsible investment strategist at PME, emphasizes that they are still waiting for an explanation from BlackRock itself. He also states that with the return of Trump, it is almost impossible to continue investing in American companies. After all, their objective is different: "climate risks are investment risks", according to BlackRock.
Future
Although American companies are rolling back their ESG objectives, there is still a lot of attention for sustainability in both the Netherlands and Europe. The European Commission does not seem to be influenced by the American factors and is launching a global forum this week to accelerate the transition to clean energy. According to the European Commission, the ESG criteria are becoming increasingly important for investors and companies in Europe.
There also seems to be no restraint in European regulations. The future of European ESG regulation is mainly driven by the already implemented CSRD (Corporate Sustainability Reporting Directive) and SFDR (Sustainable Finance Disclosure Regulation). In addition, the CSDDD (Corporate Sustainability Due Diligence Directive) was adopted last May, which obliges large companies to ensure that both their own activities and those of their suppliers do not harm the environment and respect human rights. These implementations have led to a trend of legal procedures regarding climate policy. In contrast with America, there is a full commitment to further developments in both Europe and the Netherlands.
Conclusion
The departure of, among others, the American BlackRock and banks from climate initiatives such as NZAM and NZBA is the result of national political pressure. Under the influence of the so-called "Trump effect", American companies are withdrawing their climate targets. Despite these geopolitical choices, the Netherlands remains steadfast in its sustainability goals: Sustainability is here to stay. Although Mr. Trump will hold the American presidency for the next four years and thus exert influence on international sustainability, European ESG regulations remain unwavering. Now that the largest economy in the world is thinking about quick wins with terms such as 'drill, baby, drill!', we Europeans are thinking about a future-proof economy, where our next generations can also exercise their prosperity.
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