Why Did The Net Zero Banking Alliance Shut Down?
The Net Zero Banking Alliance (NZBA) has been shut down with immediate effect following a vote by its members.
This development raises questions about the banking sector's dedication to carbon reduction strategies, particularly after a series of high-profile departures from major financial institutions, including JPMorgan Chase, Barclays and UBS.
A spokesperson for the NZBA states that members chose to transition from a membership-based alliance to “establishing its guidance as a new framework initiative”.
The guidance and its supporting resources are recognised as the most widely used global banking framework for setting decarbonisation targets and will continue to be publicly available for use.
The spokesperson adds: “The Guidance for Climate Target Setting for Banks and supporting implementation resources are the most widely used global banking framework focused specifically on setting decarbonisation targets and will remain publicly available.
"Individual banks worldwide can continue to use and reference these resources to help develop and deliver on their own net zero transition plans.”
A mass departure of global banks
The decision to disband the alliance follows a large exodus of members. The list of departed institutions includes some of the world's largest banks:
- JPMorgan Chase
- Citigroup
- Bank of America
- Goldman Sachs
- UBS
- Wells Fargo
- Morgan Stanley
- HSBC
- Barclays
- Bank of Montreal
- National Bank of Canada
- TD Bank
- Canadian Imperial Bank of Commerce
- Scotiabank
These departures could be attributed to several factors, including a desire for greater operational autonomy in sustainability reporting, concerns over legal exposure and increasing regulatory and political pressure, particularly from the United States following the presidential election.
Established in 2021, the NZBA was a global initiative designed to encourage banks to align their lending and investment portfolios with net zero greenhouse gas emissions by 2050.
The alliance provided resources to help members set science-based targets and develop strategies consistent with the Paris Agreement, setting rules for members to align both their operational and financed emissions with pathways to net zero.
Disappointment and accountability concerns
The closure of the NZBA has been met with strong criticism from some quarters. Jeanne Martin, Co-Director of Corporate Engagement at ShareAction, expresses her disapproval of the move.
“It’s bitterly disappointing to see the biggest banks in the world vote to step away from accountability around their commitments to prevent the worst effects of global heating,” Jeanne explains.
She adds: “The climate crisis is increasing food prices, multiplying health risks with extreme heat, especially for the most vulnerable in society, and causing destruction to homes and lives through floods and wildfires.”
Jeanne continues, stating that public support for climate action remains high despite some governments and corporations reducing their efforts.
“Senior bankers need to be far more courageous in this decisive moment for all our futures and must use their influence to push up standards for accountability on climate if we are to stand any chance of making the clean energy transition happen," she says.
Waning influence and political headwinds
The influence of the NZBA has been visibly declining. According to reports, in November 2024, its 140 member banks represented total banking assets of US$75.5trn.
By August 2025, following the exits of HSBC, Barclays and UBS, that figure had fallen to US$42.2trn.
In its announcement, Barclays notes that with the departure of most global banks, the NZBA no longer had the membership to “support our transition”.
Political pressure, especially from Republican states in the US, has been a major factor.
Major banks and climate alliances faced threats of antitrust lawsuits for allegedly “boycotting” fossil fuels, with investigations being shelved once US banks exited the NZBA.
During Climate Week NYC, Satya Tripathi, Former Secretary of the UN’s Environment Management Group, urges banks not to bow to political pressure.
Satya says: “Net zero has become a political goal. When the political leadership changes, you are left standing in the middle of the public square.”
His comments highlight the challenging position financial institutions occupy as they navigate changing political landscapes while addressing long-term climate commitments.
