The Net Zero Banking Alliance (NZBA), a high-profile, U.N.-convened coalition of banks committed to aligning their lending and investment portfolios with net-zero emissions by 2050, has announced its immediate dissolution. The decision follows a vote by remaining members to transition the group from a member-based alliance into a non-binding guidance framework, prompted by a wave of high-profile departures from major global lenders.
Mass exodus triggers closure:
The alliance’s unraveling began with the mass exit of major North American banks, including JPMorgan Chase, Citibank, and Goldman Sachs, starting in late 2024. This was largely attributed to mounting political pressure and legal threats from anti-ESG (environmental, social, and governance) campaigners and lawmakers, particularly in the U.S., who alleged that the climate commitments constituted an antitrust violation. European banks like HSBC and Barclays later followed suit. The loss of these major financiers crippled the alliance’s collective influence and accountability structure.
Backdrop:
The Net Zero Banking Alliance was launched in April 2021 under the United Nations Environment Programme Finance Initiative (UNEP FI) and quickly grew to nearly 150 members, representing a significant portion of global banking assets. Its mandate required members to set science-based interim 2030 targets and report publicly on their progress toward decarbonizing their financed emissions, in line with limiting global warming to 1.5°C. The alliance was a core component of the broader Glasgow Financial Alliance for Net Zero (GFANZ).
The world reacts:
“As a result of this decision, NZBA will cease operations immediately. The Guidance for Climate Target Setting for Banks and supporting implementation resources will remain publicly available for individual banks worldwide to reference in their own net-zero transition plans,” said an NZBA spokesperson.
“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,” said Jeanne Martin, Co-Director, Corporate Engagement, ShareAction.
“Like other financial alliances of its kind, it brought little—if anything—to the climate and was doomed to fail. Its purpose was never to take real action but to create the illusion of measures to ward off the risk of regulation,” said Lucie Pinson, Director, Reclaim Finance.
The impact:
The NZBA website now redirects to a page of resources the alliance has developed for the banking industry. Included on that page is “version 4” of its banking sector target-setting guidance. The updated guidance removes references to NZBA, the alliance, and its signatories and replaces them with references to the banking industry and banks broadly.
Meanwhile, the NZBA’s closure signals a major shift in the climate finance landscape, moving away from voluntary, collective industry commitments toward a more fragmented and politically charged environment. The demise of the most significant banking coalition diminishes shared accountability and peer-learning opportunities, risking a ‘race to the bottom’ where banks’ individual climate commitments become vague and less standardized.
However, the reliance on voluntary alliances may now give way to an era where progress is driven more robustly by mandatory regulatory intervention, stronger shareholder activism, and market forces that favor banks with demonstrable, concrete transition financing plans, forcing climate responsibility squarely onto the shoulders of individual bank CEOs.
