NZBA’s Diluted Climate Ambitions Prompt Triodos Bank Exit
Banks need to be sustainable to align with evolving consumer expectations, mitigate environmental and social risks and drive long-term economic and social impact.
In line with this belief, Triodos Bank has announced its decision to leave the Net Zero Banking Alliance (NZBA) following a majority vote among alliance members to weaken the alliance’s climate ambitions.
The Dutch bank, renowned for its commitment to sustainability, states that the changes undermine the urgency needed to align with the Paris Agreement and maintain global warming within safe limits.
A stand against lowered standards
Triodos Bank is expressing deep concern that the NZBA’s shift from binding targets to looser guidelines will water down the alliance's effectiveness.
In particular, Triodos disagrees with the removal of the mandatory 1.5 degrees Celsius alignment target – a key benchmark to limit catastrophic climate disruption.
"Remaining a member under these less stringent guidelines, and seeing what we have achieved over the years being watered down, would not align with our own climate ambition and commitment to combatting climate change," comments Triodos.
Although Triodos acknowledged improvements in the NZBA’s updated guidelines released in March 2024, it maintained that the revisions failed to deliver the necessary urgency or enforceable standards.
"The softening of ambitions is a step in the wrong direction. We can no longer justify remaining a member," says Jacco Minnaar, Director at Triodos Bank.
"We tried to change the coalition from within, but unfortunately we did not succeed."
Strengthening climate commitment
Rather than compromise, Triodos Bank is choosing to strengthen its climate targets.
It now aims to reduce its financed emissions by at least 42% by 2030, raising its previous commitment of a 32% reduction.
The bank is focusing on immediate, short-term emissions reductions to contribute meaningfully to global climate action.
Triodos also emphasised the urgent need to phase out fossil fuel production, end exploration and expansion projects and transition investment and lending portfolios toward genuinely sustainable activities.
"Each one of us can take a surprisingly impactful step to contribute to a fairer, sustainable world, simply by switching bank or savings accounts,” says Roger Hattam, Director of Retail Banking at Triodos Bank UK.
“Every penny and pound in sustainable savings or investments is helping to collectively finance advances in renewable energy, community-led initiatives and businesses that promote fair and equitable treatment of everyone.
"Since the Paris Agreement was signed, the world’s 60 largest banks have poured over US$6.9tn of money into the fossil fuel industry in the form of loans and underwriting. It’s time to arrest this trend, and customers have the power in their wallets.
“As a sustainable bank, Triodos offers an alternative – with a proven track record of funding sustainable projects and endorsing bold global initiatives, such as the Fossil Fuel Non-Proliferation Treaty."
Pressure on climate alliances
The NZBA, founded in 2021, brought together major global banks committed to achieving net zero emissions across their portfolios by 2050.
However, the alliance is facing increasing political pressure, particularly from the United States, where the re-election campaign of Donald Trump has intensified scrutiny of so-called ‘climate cartels’.
Several major US banks, including Citigroup and Goldman Sachs, recently withdrew from the NZBA amid fears of legal and political repercussions.
In response, the NZBA announced a shift towards encouraging green finance activities rather than requiring banks to phase out high-emissions activities. This pivot sparked internal division, culminating in the majority vote to lower standards.
While major Dutch banks such as Rabobank, ABN Amro and ING have chosen to remain, Triodos believes that without strict, enforceable commitments, the alliance can no longer serve as an effective mechanism to drive meaningful climate action.
In a written statement, a spokesman for Rabobank said: "The NZBA is and will remain a valuable platform for questions and sharing experiences with other banks, for example on how to properly set and report climate targets."
Continued cooperation and advocacy in the financial sector
Although it is leaving the NZBA, Triodos Bank remains committed to collaboration within the financial sector to accelerate climate action.
It will continue to work with global and regional initiatives such as the Global Alliance for Banking on Values, the European Banking Federation and UK Finance.
Triodos reaffirmed its belief that banks have an ethical and moral responsibility to drive the transition to a sustainable economy.
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