Why Have Global Banks Shut Down Net Zero Banking Alliance?

The Net Zero Banking Alliance (NZBA) has shut down with immediate effect, prompting questions about the banking industry’s commitment to carbon reduction.

A spokesperson for the NZBA said members voted to move from a membership-based alliance to “establishing its guidance as a new framework initiative”.

The spokesperson added: “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.

A global banking exodus

The move follows a long list of departures from the NZBA in recent months, linked to US President Donald Trump’s election and subsequent attacks on DEI and net zero.

The exodus includes:

• 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 exits could be down to emerging desires for operational autonomy, legal exposure and growing regulatory and political pressure.

How did the NZBA support banks?

The NZBA is a global initiative encouraging banks to commit to aligning financing portfolios with net zero greenhouse gas emissions by 2050.

Those that participate in the alliance receive support and resources to set science-based targets, develop strategies and make progress towards the stipulations in the Paris Agreement. 

The alliance aims to signpost methodologies, resources and best practices around key areas like data management. 

It also sets rules to abide by, like the need to align operational and financed emissions with net zero pathways to 2050, setting 2030 targets and publishing absolute emissions and emissions intensity annually.

A ‘bitterly disappointing’ decision

The decision to close NZBA has been received with anger in some quarters.

Jeanne Martin, co-Director of Corporate Engagement at ShareAction said: “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.

“The climate crisis is driving up 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 added: “Despite some governments and corporates dialling down on their efforts to tackle the climate crisis, public support for climate action remains high and many investors are all too conscious of the massive risks to the economy of a worsening climate.

“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.”

A declining influence

In November 2024, the NZBA had 140 member banks representing total banking assets of US$75.5tn.

By August 2025, that figure was down to US$42.2tn, in the wake of the most recent departures by HSBC, Barclays and UBS.

Announcing its August exit, Barclays said with the departure of most of the global banks from the alliance, the organisation no longer had the membership to “support our transition”.

The NZBA was set up in 2021 alongside the Glasgow Financial Alliance for Net Zero, which was formed during the COP26 climate conference in Glasgow.

Following a restructuring earlier this year, the Alliance is no longer associated with any of the net zero alliances, which were set up for banking, insurance and asset owners. The Net-Zero Insurance Alliance disbanded last year and rebranded following the departures of large insurers.

Political pressure

In the US, particularly in Republican states, intense political pressure has been put on major banks and climate alliances.

Some have been threatened with antitrust lawsuits for “boycotting” fossil fuels. Investigations that were launched were quickly shelved once US banks exited the NZBA.

During Climate Week NYC in New York, Satya Tripathi, former secretary of the UN’s Environment Management Group and a former head of UN Environment New York, called on banks to “stand up for what they believe in” and not bow to political pressure to backtrack on their climate commitments.

Satya said: “Net zero has become a political goal. When the political leadership changes you are left standing in the middle of the public square.”