The Net-Zero Banking Alliance (NZBA) has announced the cessation of its operations, marking the end of the UN-backed coalition’s efforts to advance global net-zero goals through banking sector activities. This decision comes after a series of high-profile departures, prompting member banks to vote for a significant restructuring. The NZBA will transition from a membership-based alliance to a framework providing guidance on setting decarbonisation targets to support banks’ climate transition plans.
The NZBA, established in 2021, initially focused on aligning banks’ lending activities with net-zero pathways by 2050, with interim 2030 targets for key emissions-intensive sectors. In April 2024, it expanded its guidelines to include capital markets activities, such as debt and equity underwriting, to meet 2050 net-zero goals.
Despite its rapid growth from 43 banks in 2021 to over 140 banks representing $74 trillion in 2024, the NZBA faced significant pressure, particularly from U.S. Republican politicians. These politicians warned financial institutions of potential legal violations for participating in climate-focused alliances, as part of a broader anti-ESG campaign.
The departures began in late 2024, with Goldman Sachs and other major Wall Street banks withdrawing, followed by Canadian banks in early 2025. In response, the NZBA members agreed to remove mandatory requirements for aligning financing activities with the 1.5°C global warming limit.
While the changes briefly slowed defections, high-profile exits resumed, with HSBC, UBS, and Barclays leaving over the summer, citing insufficient membership support. In conjunction with the announcement, the NZBA published updated “Guidance for Climate Target Setting for Banks,” aligned with the Paris Agreement’s objectives.
The NZBA spokesperson emphasised that the guidance and supporting resources remain available for banks worldwide to develop and implement their net-zero transition plans. Gill Lofts, Global Financial Services Sustainable Finance Leader at EY, highlighted that this shift reflects a pragmatic reassessment of current realities and opens opportunities for broader participation, especially from banks in emerging markets.
The NZBA’s restructuring is part of a broader trend among climate-focused financial alliances facing similar political pressures. Organisations like the Net Zero Asset Managers initiative (NZAM) and the Net-Zero Insurance Alliance (NZIA) have also undergone significant changes, with some suspending activities or disbanding. The Glasgow Financial Alliance for Net Zero (GFANZ) has restructured, focusing on initiatives to mobilise capital for the low carbon transition.
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