Mark Carney’s global climate finance initiative has suffered its biggest blow yet with BlackRock, the world’s largest asset manager, announcing Thursday that it’s leaving the club. 

Once considered a leader in sustainable finance, BlackRock joins a string of large U.S. banks that have quit the climate alliance. The exodus casts doubt on the future of the pact, and whether it can achieve its net-zero ambitions.  

Here’s what you need to know: 

What’s GFANZ? Mark Carney, the former central banker for Canada and the U.K., launched the Glasgow Financial Alliance for Net Zero (GFANZ) in 2021. The initiative was a cornerstone of the COP climate summit in Glasgow that year, with 450 financial firms controlling some US$130 trillion pledging to divert financing to projects and assets that were committed to net-zero emissions by 2050. 

Who’s out? The banking coalition, one of several umbrella groups within GFANZ, has hemorrhaged members in the past month, with U.S. lenders Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley and JPMorgan Chase all calling it quits.

BlackRock’s departure is especially poignant, given the firm’s size—it manages about US$11.5 trillion in assets—and the influence it has on the finance sector. In a letter to clients Thursday announcing its departure, the firm said the alliance had “caused confusion” about its practices and triggered “legal inquiries from various public officials.”

A change of heart: The departures follow intensifying backlash in the U.S. to environmental, social and governance initiatives, including from Republicans politicians, who say the principles don’t jibe with fiduciary duties. Donald Trump’s second term in the White House is expected to amplify those sentiments with attacks on sustainable finance and the reversing of climate initiatives.

Who’s still in? Last year, GFANZ had about 700 members in 55 jurisdictions. A spokesperson for the organization declined to answer The Logic’s questions, including about its current membership numbers. As of Friday, eight Canadian banks, including its Big Six, were still listed among the 141 members of the banking group. At an industry conference earlier this week, the CEOs of RBC and BMO signalled that they were open to leaving the coalition. 

What’s next for GFANZ: The organization announced a string of changes amid the recent quitting spree, including that new members no longer need net-zero commitments to participate. Instead, GFANZ “will allow any financial institution working to mobilize capital and lower the barriers to financing energy transition to participate,” per a statement signed by Carney, GFANZ co-chair Michael Bloomberg and vice chair Mary Schapiro. The organization also said it will shift focus to helping emerging and developing economies lower emissions. 

What it means for Carney: Climate finance has been Carney’s focus since leaving the Bank of England in 2020. The watering down of his flagship project—and the broad rejection of its basic ethos—could be a strike against him just as he’s expected to launch a run for the leadership of Canada’s Liberal party.