The Net-Zero Banking Alliance (NZBA), a UN-supported coalition of banking institutions focused on advancing global net zero goals through financing activities, has announced a pause in its operations. This decision comes amid several high-profile departures and a proposed significant restructuring, including abandoning its current membership-based format.
The NZBA has initiated a vote among its members on a proposed transition to a new framework initiative, with results expected by the end of September. The Steering Group has stated that this model is deemed most appropriate for supporting banks globally, ensuring resilience, and accelerating the transition of the real economy in alignment with the Paris Agreement. The group also aims to continue engaging with the global banking sector to develop further guidance and tools.
Launched in 2021, the NZBA committed its members to align their lending activities with net zero pathways by 2050 and set 2030 targets for financed emissions in key sectors. In April 2024, the alliance expanded its guidelines to include commitments to align capital markets activities with 2050 net zero goals.
The alliance grew rapidly from 43 banks at its inception to over 140 banks, representing $74 trillion by 2024. However, it faced pressure, particularly from U.S. Republican politicians, who warned financial institutions about potential legal risks and exclusion from state business as part of a broader anti-ESG political campaign.
Departures began in late 2024 with Goldman Sachs, followed by other major Wall Street and Canadian banks. In response, the NZBA members agreed in April 2025 to significant changes, including removing the requirement to align financing with the 1.5°C global warming limit.
Despite these adjustments, high-profile exits continued, with HSBC leaving in July, followed by UBS and Barclays in August. Barclays cited the reduced membership as a reason for its departure.
The NZBA is part of a broader coalition of climate-focused financial sector alliances, which have similarly faced political pressure. Other coalitions, such as the Net Zero Asset Managers initiative and the Net-Zero Insurance Alliance, have also seen significant changes or suspensions.
In a statement to ESG Today, an NZBA spokesperson reaffirmed the organisation’s commitment to supporting banks in addressing climate change impacts. The spokesperson noted the initiation of a member vote to decide on transitioning from a membership-based alliance to a new framework initiative. The NZBA has paused its activities pending the vote’s outcome, expected at the end of September, and encourages the banking sector to maintain their net-zero commitments.
