Big Banks Ditch Climate Coalition

Summary

WSJ What’s News: Episode Summary – "Big Banks Ditch Climate Coalition"

Release Date: January 3, 2025

The Wall Street Journal's "What’s News" podcast episode titled "Big Banks Ditch Climate Coalition" delves into significant developments impacting the financial sector, global politics, and technological infrastructure. Hosted by Luke Vargas, with contributions from correspondents Danny Lewis and Dov Lieber, the episode provides a comprehensive overview of the day's top stories, enriched with expert insights and notable quotes. Below is a detailed summary of the key topics discussed.

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1. US Steel's Takeover Blocked by President Biden

The episode opens with a critical update on the steel industry. U.S. Steel shares plummeted in premarket trading following reports that President Biden intends to block the company's takeover by Japan’s Nippon Steel.

Key Points:

• Blocking the Takeover: President Biden has signaled his opposition to the acquisition, aligning with his stance that U.S. steel should remain domestically owned and operated—a view also favored by President Elect Trump.

• Company Efforts to Salvage the Deal: Both U.S. Steel and Nippon Steel attempted to mitigate opposition. U.S. Steel pledged to create a workforce training center in western Pennsylvania to address concerns surrounding the takeover.

• Market Reaction: The Wall Street Journal reported that these developments led to a sharp decline in U.S. Steel's stock during off-hours trading.

Notable Quote:

"President Biden previously said that U.S. steel should remain domestically owned and operated, a view shared by President Elect Trump." — Luke Vargas (00:57)

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2. Major Banks Exit the Net Zero Banking Alliance

A significant focus of the episode is the exit of major American banks from the Net Zero Banking Alliance, a climate initiative aimed at reducing corporate carbon emissions.

Key Points:

• Exiting Banks: Morgan Stanley, Citi, and Bank of America have recently withdrawn from the coalition, following Wells Fargo and Goldman Sachs' exits over the past month. JPMorgan Chase is reportedly considering leaving as well.

• Reasons for Withdrawal: The departure reflects a broader corporate pullback from Environmental, Social, and Governance (ESG) initiatives, driven in part by the impending second Trump administration. Republicans have criticized the Net Zero alliance, arguing it unfairly targets the oil and gas industries and may infringe upon antitrust laws.

• Banks' Responses:

  • Morgan Stanley and Goldman Sachs reaffirmed their commitment to their own net-zero goals.
  • Citi intends to focus on a broader climate-focused group that it co-founded.
  • JPMorgan Chase stated that it regularly evaluates its memberships to ensure alignment with its interests.

Notable Quotes:

"The exodus reflects a broad pullback from ESG initiatives by corporate America ahead of the second Trump administration." — Luke Vargas (03:45)
"Morgan Stanley and Goldman say they're committed to their own net zero goals, while Citi says it plans to focus on a broader climate-focused group that it co-founded." — Luke Vargas (04:20)

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3. Meta's Leadership Change Amid Political Shifts

The podcast highlights a strategic leadership change at Meta as the company navigates evolving political landscapes.

Key Points:

• Leadership Replacement: Meta has appointed Joel Kaplan, a Republican deputy and former aide to President George W. Bush, as its new chief policy executive, replacing Nick Clegg, the former head of the UK's Liberal Democratic Party.

• Strategic Implications: Kaplan's appointment signals Meta's intent to strengthen ties with Republican circles and the broader conservative ecosystem, potentially influencing the company's policy directions and lobbying efforts.

Notable Quote:

"Kaplan... has long served as the social media company's conduit to Republicans in Washington and to the broader conservative ecosystem." — Luke Vargas (04:32)

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4. Data Center Expansion Faces Local Pushback in Atlanta

The surge in demand for data centers, driven by the AI boom, is met with resistance at the local level, particularly in Atlanta.

Key Points:

• Growth of Data Centers: The AI-driven surge has led to a land rush for data centers, which are essential for supporting extensive computing needs.

• Local Concerns: In Atlanta, land use issues are prompting opposition to the rapid development of data centers. Critics argue that these facilities often occupy prime real estate suitable for housing, exacerbating existing housing shortages exacerbated by financing challenges.

• Regulatory Actions:

  • In September, Atlanta's City Council banned new data centers near public transit areas.
  • Fairfax County in Northern Virginia has introduced similar restrictions, prohibiting data centers within a mile of rail stations.

Notable Quote:

"Some of the land that data center operators are attracted to is land that would be prime for building more housing... the city is worried that if all of that land fills up with data centers... a lot of the sites that would have been really great to put more housing won't be available anymore." — Unnamed Speaker (04:32)

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5. South Korea's Impeached President Evades Arrest

A dramatic political incident unfolds in South Korea, where the impeached President Yoon Suk Yeol narrowly escapes arrest.

Key Points:

• Attempted Arrest: Approximately 200 bodyguards successfully repelled an attempt by around 30 investigators to detain President Yoon Suk Yeol.

• Legal and Constitutional Implications: While constitutional law experts argue that the security team's actions likely stemmed from safeguarding the president's safety, rather than defying arrest, this incident underscores the intense political turmoil following Yoon's impeachment.

• Ongoing Legal Proceedings: Yoon's arrest warrant remains valid until Monday, indicating the possibility of future detention attempts.

Notable Quote:

"Investigators had warned presidential security personnel they could be charged for helping Yoon to defy arrest, though constitutional law experts say the security team appeared to view the arrest as a threat to the president's safety." — Luke Vargas (06:28)

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6. Intensifying Conflict in the West Bank Between PA and Hamas

A significant portion of the episode is dedicated to the escalating conflict in the West Bank, where the Palestinian Authority (PA) is clashing with Hamas militants.

Key Points:

• Nature of the Conflict: For the first time since Hamas seized full control of Gaza in 2007, severe fighting has erupted between the PA's security forces and Hamas militants in the West Bank city of Jenin. This marks a departure from the usual confrontations between Israeli forces and Palestinian militants.

• Impact on Civilians: The crackdown has resulted in approximately 11 fatalities, including civilians and a journalist. The PA claims militants have embedded themselves in civilian areas, justifying their aggressive tactics.

• PA's Objectives and Risks:

  • The PA aims to regain legitimacy by asserting control over militant activities, potentially positioning itself as capable of governing Gaza if endorsed by external powers like the Biden administration.
  • However, the operations risk alienating the already fragile support base among Palestinians, especially if civilian casualties persist.

• Regional Implications: Israeli Prime Minister Benjamin Netanyahu opposes the PA taking control of Gaza, complicating international support for the PA's initiatives. Additionally, the weakening influence of the Iranian axis may influence the dynamics between different militant groups and the PA.

Notable Quotes:

"The PA is making a very risky move here. If it succeeds, it may win back some legitimacy. If it doesn't succeed and it kills civilians and it causes a lot of damage and nothing changes, well, it could lose the legitimacy among Palestinians, and it barely has today." — Dov Lieber (04:57)
"If you ask the Palestinian Authority, they say it's just got out of control... they're worried that Israel could do in the west bank what it did in Gaza if these militant groups continue to operate out of these areas." — Dov Lieber (09:16)

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Conclusion

The episode culminates with a reflection on the interconnectedness of today's events and their implications for the future. From significant shifts in the financial sector's approach to climate initiatives to geopolitical tensions in the Middle East and technological expansions facing societal pushback, the stories underscore the dynamic and often volatile nature of global developments.

Closing Quote:

"The future, the future, the future." — Dov Lieber (06:16)

Luke Vargas signs off, emphasizing the podcast's commitment to delivering timely and insightful news coverage.

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This summary encapsulates the key discussions and insights from the "What’s News" podcast episode, providing a comprehensive overview for listeners and non-listeners alike.

Transcript

[Luke Vargas]

3, 2, 1.

[Danny Lewis]

What will the world look like 10 or 20 years from now? The Wall Street Journal's Future of Everything podcast is here to give you a peek, and we can't wait to show you what's coming. Subscribe now.

[Luke Vargas]

US Steel shares tumble premarket on reports that Nippon Steel's takeover bid is set to be blocked by President Biden. Plus, America's big banks head for the exits of a climate coalition meant to reduce carbon emissions, and a West bank power struggle turns deadly as the Palestinian Authority battles Hamas militants and their allies.

[Dov Lieber]

So the PA is making a very risky move here. If it succeeds, it may win back some legitimacy. If it doesn't succeed and it kills civilians and it causes a lot of damage and nothing changes, well, it could lose the legitimacy among Palestinians, and it barely has today.

[Luke Vargas]

It's Friday, January 3rd. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of what's news, the top headlines and business stories moving your world today. Shares of U.S. steel are dropping sharply in off hours trading this morning on media reports that President Biden plans to block the company's takeover by Japan's Nippon Steel. The Washington Post first reported Biden's planned decision, citing unnamed sources. Both companies had been making last ditch efforts to win over critics of the proposed takeover with U.S. steel overnight pledging to create a workforce training center in western Pennsylvania if the deal went through. President Biden previously said that U.S. steel should remain domestically owned and operated, a view shared by President Elect Trump. Boeing is conducting more surprise inspections at its factories as part of a plan to prevent manufacturing faults like the one that led to a jet panel blowout on an Alaska Airlines flight a year ago. The jet maker today outlined more than a dozen steps it's taken in recent months to tack a manufacturing quality crisis that has forced the company to slow production and placed it under regulatory scrutiny. Some of those steps have been previously reported. America's biggest banks are walking away from the Net Zero Banking alliance, an ambitious pandemic era climate coalition aimed at pushing for a reduction in carbon emissions by businesses. Morgan Stanley, Citi and Bank of America all pulled out this week, following in the footsteps of Wells Fargo and Goldman Sachs, which withdrew over the month. And according to a person familiar with the matter, JPMorgan Chase, the only major US lender left in the coalition, is now considering leaving, too. The exodus reflects a broad pullback from ESG initiatives by corporate America ahead of the second Trump administration. Banks in particular have faced harsh criticism over the Net Zero alliance from Republicans who've argued it amounts to a boycott of the oil and gas industries and that it could violate antitrust laws. Morgan Stanley and Goldman say they're committed to own net zero goals, while Citi says it plans to focus on a broader climate focused group that it co founded. A JP Morgan spokeswoman, meanwhile, said the bank regularly evaluates memberships to ensure they further its interests well. In its latest move to prepare for change in Washington, Meta is replacing its chief policy executive, Nick Clegg, the former head of the UK's center left liberal Democratic Party, with his Republican deputy, Joel Kaplan. Kaplan, a former aide to President Geor W. Bush and a friend of Supreme Court Justice Brett Kavanaugh, has long served as the social media company's conduit to Republicans in Washington and to the broader conservative ecosystem. Data centers were the darlings of commercial real estate in 2024 as the AI boom drove a land rush for sprawling computing facilities. And with suitable sites still in short supply, 2025 is likely to bring yet more development nationwide. But as Journal reporter Will Park Tech News Briefing podcast in one city that's seen more data center growth than almost anywhere else in the US Atlanta land use concerns are sparking local pushback against the rapid development of power hungry facilities that are often light on permanent staff.

[Unknown]

Some of the land that data center operators are attracted to is land that would be prime for building more housing. This is land around transit corridors. The problem right now is that not that many people are building apartments due to financing issues. And the city is worried that if all of that land fills up with data centers by the time the market is more suitable for apartment construction again, you know, a lot of the sites that would have been really great to put more housing won't be available anymore.

[Luke Vargas]

In September, Atlanta's City Council banned new data centers from opening in neighborhoods near public transit, a move that was recently echoed by Fairfax county in Northern Virginia, another data center mecca, which said the facilities can't be located within a mile of rail stations. And for more on this trend, check out today's episode of Tech News Briefing wherever you get your podcasts. And in markets today, U.S. stock futures are ticking up, suggesting that stocks could break a recent losing streak. And we'll get the latest checkup on the health of the auto sector later, when a number of U.S. carmakers disclose sales for the fourth quarter. Coming up, the Journal's Dover breaks down a worsening power struggle unfolding in the west bank that could have potential implications for who governs post war Gaza. That story and more after the break.

[Dov Lieber]

What then will the future reveal?

[Danny Lewis]

There's one thing we know about the future. It's being built now.

[Luke Vargas]

We all have a stake in the future. The future, the future, the future.

[Danny Lewis]

And the Wall Street Journal's Future of Everything podcast is here to give you a glimpse of what's on the way. I'm Danny Lewis. Join us as we dig into how science and technology are shaping the future.

[Dov Lieber]

For that is where you and I are going to spend the rest of our lives.

[Danny Lewis]

Subscribe wherever you get your podcasts.

[Luke Vargas]

South Korea's impeached President Yoon Suk Yeol avoided arrest today as roughly 200 bodyguards fended off an effort by around 30 investigators to detain the 64 year old leader. Investigators had warned presidential security personnel they could be charged for helping Yoon to defy arrest, though constitutional law experts say the security team appeared to view the arrest as a threat to the president's safety. The hours long standoff is the latest tumult to stem from Yoon's martial law decree last month, which led lawmakers to impeach him, thereby stripping him of his political powers. Yoon's stand in was also impeached last week. Investigators could try to arrest Yoon again as the arrest warrant for him is valid through Monday. While much of the focus lately in the Middle east has been on Syria and Gaza, a security crisis has been unfolding in the occupied west bank over recent weeks, pitting the Palestinian Authority against Hamas militants and their allies. And here to talk about that situation and the high stakes that it carries is Journal correspondent Dov Lieber. Dov, for a while now, the very simplified way to understand the Palestinian political situation has been, and correct me if I'm wrong here, that the Palestinian Authority under Fatah runs the west bank and Hamas governs Gaza. But evidently that situation is not so clear cut. What has been happening lately, this is.

[Dov Lieber]

The first time we've seen such severe fighting between these two factions, really basically for the first time since Hamas took full control of Gaza in 2007. And now it's happening in the west bank city of Jenin. Jenin is a hotspot for conflict, but usually between the Israeli military and Palestinian militants. And now we're seeing it happening between the Palestinian Authority security forces and militants inside Jenin's refugee camp. So it's crowded, it's poverty stricken, and it's largely controlled by militants. And this type of situation has happened all across the west bank where these refugee camps have been largely taken control over by militants. And Palestinian security forces launched this crackdown that's been going on now since early December.

[Luke Vargas]

Has it been deadly? What have we been seeing?

[Dov Lieber]

Right, so there's something around 11 fatalities so far. Several are civilians, including one journalist. So what's happening is these Palestinian security forces have basically besieged the refugee camp. They say that the militants have embedded themselves in a civilian area using IEDs next to schools or medical clinics, and they have no choice.

[Luke Vargas]

The Palestinian Authority getting serious about fighting these militants, what could that signal? This is a group that for the last few years, we've talked about more as a ineffectual political force, but now taking on a big security operation.

[Dov Lieber]

It seems, if you ask the Palestinian Authority, they say it's just got out of control. And more than that, they say, and here's how the war in Gaza comes into play. They say by these militant groups operating out of Palestinian cities, they give Israel the pretext to carry out deadly raids inside Palestinian territories. And they say that they're worried that Israel could do in the west bank what it did in Gaza if these militant groups continue to operate out of these areas. Now, analysts will tell you a few things. First, this is the Palestinian Authority President Mahmoud Abbas showing that his security forces are capable, if they ever want, to also be placed inside the Gaza Strip in order to take over control of that enclave from Hamas.

[Luke Vargas]

That's an idea that the Biden administration has backed.

[Dov Lieber]

Correct? The Biden administration wants it to be the Palestinian Authority. But here's the hitch. Israeli Prime Minister Benjamin Netanyahu has said this is not going to happen. So some analysts will say it's really about cementing control in the West Bank. And why do they have to cement control now? Well, they're looking at Syria, and they saw, you know, a ragtag team of militants with pickup trucks and light arms can topple a government. Why couldn't it happen in the West Bank? But another lesson from Syria is that the Iranian axis, of which Hamas and these military groups are a part of, is severely weakened. And potentially they see an opportunity to remove their competing faction, which is linked to Iran. Iran funds these groups. It's unclear how much control they really have with these groups. These militant groups are deeply rooted in Palestinian society, so much so that it's unclear at the moment whether a majority of Palestinians support the crackdown of militants in Jenin.

[Luke Vargas]

Right. In addition to the risk that this all just descends into further fighting, a problem, I imagine, for the west bank as a whole. The PA is, it sounds like in a bind here, maybe trying to improve its legitimacy through this operation. But in the process potentially jeopardizing its reputation within the territory.

[Dov Lieber]

Correct. And using force inside civilian areas. That's true. So the PA is making a very risky move here. If it doesn't succeed and it kills civilians and it causes a lot of damage inside this refugee camp and nothing changes. Well, it could lose the legitimacy among Palestinians it barely has today.

[Luke Vargas]

In terms of the risks for the PA here, could they be seen as aligning with Israel? I mean, the PA this week also suspended Al Jazeera's activities in the west bank, something Israel's done as well. Is there a risk there?

[Dov Lieber]

Absolutely correct. It's a huge risk. So already the PA is seen by many Palestinians as basically doing the bidding of Israel. But this time the Palestinian Authority isn't backing down. And in fact, they told us, we asked them about this, is there a timestamp on this operation? They said, no, they're not going to finish till it's over. And that's a recipe for an escalation potentially. But they're showing determination. And Israel is quite surprised by this. But it's important to note that Israeli officials as well as officials from the Palestinian Authority say this is actually a completely independent Palestinian operation.

[Luke Vargas]

I've been speaking to Wall Street Journal correspondent Dov Lieber. Dov, thanks as always for the update.

[Dov Lieber]

Thank you for having me.

[Luke Vargas]

And that's it for what's news for this Friday morning. Today's show was produced by Daniel Bach with supervising producer Christina Rocca. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Otherwise, have a great weekend, and thanks for listening.