Is HSBC Abandoning Its Net Zero Targets After NZBA Dropout?

The Net-Zero Banking Alliance (NZBA) is a global initiative supporting banks to commit to aligning financing activities with net zero emissions by 2050.

HSBC has become the first UK bank to withdraw from the United Nations-backed NZBA, a move that has sparked concern among climate campaigners and casts fresh doubt on the global banking sector’s climate ambition.

A step back for climate leadership

Launched in 2021, the NZBA was established to help align banking operations with the goals of the Paris Agreement, requiring members to set targets to achieve net zero emissions by 2050 or sooner. 

HSBC was a founding member and an early vocal advocate for the initiative, with then-CEO Noel Quinn calling for “industry-wide collaboration” and “transparent frameworks” to drive accountability.

However, just three years later, HSBC has reversed course. 

The bank said it is stepping away from the NZBA now that a foundational framework has been established and will instead focus on implementing its own net zero transition plan. 

Despite the company reiterating its 2050 net zero goal, the move has triggered widespread concern.

Global climate backlash

The departure follows a wave of exits by major US banks, including:

• JPMorgan Chase 
• Citigroup
• Bank of America
• Morgan Stanley
• Wells Fargo
• Goldman Sachs.

“Following a powerful mandate renewal and endorsement of its future direction from member banks in April this year, NZBA is helping facilitate the enabling conditions needed for banks' clients to invest in the net-zero transition," said a NZBA spokesperson.

"In the last two months alone, this has included work on policy engagement, transition finance and convening leaders from different sectors to increase understanding and accelerate progress.

"As the world urgently seeks to achieve net zero emissions by 2050, NZBA is on the strongest possible footing to support members’ continued progress on independent business strategies that are enabling the shift towards a net-zero economy.” 

These departures coincide with the re-emergence of President Donald Trump as a political force. 

With his push to expand fossil fuel production, the former president’s influence has contributed to a broader climate policy retreat among financial institutions.

HSBC’s decision also follows its February announcement to delay key emissions-reduction targets by two decades, alongside changes to executive bonus structures that effectively weakened climate-linked incentives. 

Sounding the climate alarm

Campaign group, ShareAction, described HSBC’s exit as a “troubling signal” regarding the bank’s environmental responsibility. 

“It sends a counterproductive message to governments and companies, despite the multiplying financial risks of global heating,” says Jeanne Martin, ShareAction’s Head of Banking Programme and Co-Director of Corporate Engagement.

Jeanne also states that investors will be watching closely to see whether the bank’s climate-related disclosures and financing decisions align with its public net zero claims.

Financial institutions at a crossroads

Other UK lenders, including Barclays, Lloyds, NatWest, Standard Chartered and Nationwide all continue to remain members of the NZBA. 

However, HSBC’s departure may embolden further exits, especially amid regulatory uncertainty and legal pressure in the US, where Republican lawmakers have accused banks of colluding against fossil fuel producers.

Julian Wentzel, HSBC’s Chief Sustainability Officer, previously suggested a “more measured approach” to fossil fuel lending, further raising fears of climate ambition being diluted.

The future of sustainable banking

The NZBA’s future credibility now hinges on its ability to retain a critical mass of members and maintain its influence over global financial flows. 

“We continue to support customers in all sectors to make progress towards their individual decarbonisation plans, recognising that the transition to net zero is not linear or uniform across sectors, markets and regions,” wrote HSBC in a statement on the NZBA.

“Our strategy is to provide our customers with pragmatic financing solutions that facilitate their progress and support long-term emissions reduction while advancing energy security and meeting the economic and industrial needs of today’s economy.”

With the UK government legally bound to reach net-zero by 2050, banks must decide whether to lead, follow or abandon the path toward a sustainable financial system.