By Garrett Delk, Pickering Energy Partners
The views expressed by the author are their own and do not represent the views of Energy Workforce & Technology Council.
With 2025 officially kicked off, a felt sense of pragmatism is returning to the U.S. financial system. The confluence of major U.S. lenders exiting the Net-Zero Banking Alliance (NZBA) and more recently the Fed refusing to endorse the Basel Committee’s proposal for mandatory climate risk disclosures for banks signals a return to the middle in how capital flows to the energy industry in the U.S. Additionally, major U.S. asset managers, including JPMorgan, State Street, and Goldman Sachs, have left the green investing group Climate Action 100+. What we see now is a cross Atlantic divergence in energy financing and investing requirements in North America and Europe. While European regulators, led by the European Central Bank (ECB), enforce strict climate disclosure requirements aligning with the Paris Agreement, U.S. regulators are taking the position that climate-related mandates exceed their jurisdiction and should fall under voluntary disclosures. Some obvious exceptions remain for U.S. public energy companies such as the SEC’s climate reporting mandate, but by and large these are common sense developments for the continuation of financing and investing in oil and gas projects.
Likewise, many U.S. corporates are moving in kind. A sector agnostic trend of U.S. public companies leaving behind or dramatically scaling back their net zero and climate targets has only grown since 2024. The realization that we’re quickly approaching 2030, a benchmark year for privately set climate goals, many of which are likely to be missed, corporates and asset managers are plausibly (and correctly) adding up that net zero targets by 2050 will not be achievable. The return to the pragmatic middle is clear – missed revenue and cash flow targets come with consequences while missed carbon emissions typically don’t. For example, Microsoft, one of the most ambitious climate setting corporates, recently shared that its emissions are now 30% above its baseline in 2020 and announced that it would spend $80b this year building energy intensive data centers likely driving emissions higher. This ensures that for Microsoft, balancing bottom line growth with climate targets, for some fun wordplay, is unsustainable.
These developments are particularly pointed as such initiatives like the NZBA, Basel Committee’s climate proposal and others (SBTi) like it explicitly call for the cessation of an entire industry in a ‘mere’ 25 years, by 2050. These positions remain incredibly harmful to an industry that is integral to rising standards of living, national security, and economic prosperity. Arbitrarily restricting capital flows to marginally reduce emissions in already low emissions economies across Europe and North America, in fact, works in contradiction to climate policy proponents.
U.S. energy companies should collectively breathe a sigh of relief. However, this doesn’t mean the industry is out of the woods. While these are positive developments, sustainability disclosure remains table stakes on a handful of levels for energy companies. As mentioned, the SEC’s climate proposal disclosure remains in effect, California effectively introduced climate reporting obligations for most large businesses in the U.S., and well-funded NGO’s advocating against fossil fuels over the long-term leverage advanced technology as well as data capabilities to monitor emissions and influence regulatory frameworks. Partnerships and initiatives like the Super Emitter Program allow these groups to detect and report large emission events, thereby pushing for stricter environmental compliance and maintaining pressure on the fossil fuel industry, particularly at the state level.
Energy Workforce partner Pickering Energy Partners provides insights on ESG due diligence, disclosures and reporting. Garrett Delk is Associate, Consulting & Advocacy.
