The Net-Zero Banking Alliance (NZBA), a UN-backed banking sector coalition dedicated to advancing global net zero goals through their financing activities, announced that it has paused its activities following a series of high-profile departures from its ranks, and has proposed a significant restructuring, including dropping its format as a membership-based alliance.
The NZBA said that it has initiated a member vote on its proposed transition to continue operating as a new framework initiative, with results of the vote to be released at the end of September.
The NZBA said:
“The Steering Group believes this is the most appropriate model to continue supporting banks across the globe to remain resilient and accelerate the real economy transition in line with the Paris Agreement, as well as to continue engagement with the global banking industry to develop further guidance and tools needed to support them and their clients.”
The NZBA was launched in 2021, with members committing to transition operational and attributable greenhouse gas (GHG) emissions from their lending activities to align with net zero pathways by 2050, and to set 2030 financed emissions targets, initially focused on key emissions intensive sectors. In April 2024, the group issued new guidelines for climate target setting for banks, expanding its requirements to include a commitment to align capital markets activities such as debt and equity underwriting to banks’ 2050 net zero goals, in addition to the prior lending-focused commitment.
After rapidly expanding from 43 banks at launch in 2021 to over 140 banks representing $74 trillion in 2024, NZBA members came under significant pressure, particularly from Republican politicians in the U.S., who warned financial institutions including banks, insurers, asset owners and investors of potential legal violations from their participation in climate-focused alliances and of plans to exclude the companies from state business, as part of a broader anti-ESG political campaign.
Departures from the group began late last year, with Goldman Sachs announcing a decision to leave the NZBA in December 2024, followed rapidly by all of its major Wall Street peers within a few weeks, and shortly afterwards by their Canadian counterparts in early 2025.
Following the departure of the North American banks, the NZBA’s members agreed in April 2025 to a series of significant changes to the alliance’s framework and principles, including eliminating a mandatory requirement for banks to align lending and capital markets activities with the goal of limiting global warming to 1.5°C.
While the defections slowed after the changes in April, high-profile departures from the NZBA resumed this summer, with HSBC leaving the group in July, followed in August by UBS and Barclays, with the latter bank noting that “with the departure of most of the global banks, the organisation no longer has the membership to support our transition.”
The NZBA formed part of a broader coalition of climate-focused financial sector alliances, which have largely faced similar political pressure over the past several months. Other coalitions included the Net Zero Asset Managers initiative (NZAM), Net Zero Asset Owner Alliance (NZAOA), and the Net-Zero Insurance Alliance (NZIA), among others. After several high-profile departures from each group, the NZIA was discontinued in 2024, while NZAM announced earlier this year that it will suspend its primary activities, as it moves to adapt to a changing political and regulatory environment. The UN-backed Glasgow Financial Alliance for Net Zero (GFANZ), which had acted as an umbrella group for the coalitions, also launched a significant restructuring this year, shifting its focus towards initiatives enabling the mass mobilization of capital to support the low carbon transition.
In a statement provided to ESG Today, an NZBA spokesperson said:
“As a member-based organization, NZBA is committed to supporting banks address the impacts of climate change and associated economic impacts. Responding to member input, the NZBA Steering Group has today initiated a member vote to decide on a proposed transition from a membership-based alliance to establishing its guidance as a new framework initiative. NZBA has paused its ongoing activities while members complete the current voting process and will share the outcome once voting concludes at the end of September.”
The NZBA also said that it “encourages the banking sector to remain steadfast in implementing their net-zero commitments.”
