The Net-Zero Banking Alliance (NZBA), a UN-convened coalition aimed at aligning banks’ financing activities with global climate goals, has paused operations and initiated a vote to transition away from its membership-based model.
The move follows a wave of high-profile exits and growing political pressure, particularly in the U.S.
Formed in 2021, the NZBA once represented over 140 banks managing $74 trillion in assets, all committed to net-zero emissions by 2050.
Members had pledged to align both lending and capital markets activities with the Paris Agreement, but mounting political backlash—especially from U.S. Republican lawmakers—challenged those commitments.
Critics warned that participation in climate-focused alliances could invite legal scrutiny and jeopardize public contracts.
The alliance began unraveling in late 2024, starting with Goldman Sachs and followed swiftly by other Wall Street giants.
Relevant: Morgan Stanley Joins Citi And BofA In Exiting Net-Zero Banking Alliance
Canadian banks soon exited, prompting the NZBA to revise its principles in April 2025, including scrapping the requirement for capital markets alignment with the 1.5°C warming limit.
Despite these changes, withdrawals resumed this summer. HSBC, UBS, and Barclays all left, with Barclays stating, “with the departure of most of the global banks, the organisation no longer has the membership to support our transition.”
The NZBA has now proposed a structural overhaul to continue as a “framework initiative” rather than a formal alliance. A member vote on the change is underway, with results expected by the end of September.
“NZBA has paused its ongoing activities while members complete the current voting process,” the alliance said in a statement last week, adding that it “encourages the banking sector to remain steadfast in implementing their net-zero commitments.”
The NZBA’s uncertainty mirrors broader challenges across climate-focused financial alliances, many of which have scaled back or disbanded amid political and regulatory headwinds.
Read more: NatWest Doubles Climate Finance Commitment With New Transition Framework
