The global banking industry’s foremost collective climate commitment, the Net Zero Banking Alliance (NZBA), has been officially dismantled. Convened by the UN, the alliance was meant to guide banks in aligning their investment portfolios with net-zero emissions by 2050. However, after a mass exodus of members, the group announced it was ceasing all operations effective immediately.
This dramatic failure highlights the fragility of voluntary climate initiatives in the face of political pressure. The alliance, which once counted nearly 150 members, began to hemorrhage support following the re-election of Donald Trump on a platform that celebrated fossil fuels and attacked environmental regulations. The “anti-woke” rhetoric from US politicians created a hostile environment for banks participating in such climate-focused groups.
The first to buckle were the American financial powerhouses. JPMorgan Chase, Bank of America, and four other major US banks withdrew from the NZBA late last year. Analysts viewed this as a strategic move to preempt criticism from the incoming administration and its political allies, effectively prioritizing political expediency over stated climate goals.
The departure of the US banks created a vacuum that destabilized the entire organization. European and Japanese members soon began to question their own commitment, leading to further withdrawals. The trend was solidified when major British banks, including HSBC and Barclays, also quit this past summer, leaving the alliance a shadow of its former self.
The reaction from the climate community is sharply divided. For some, the shutdown is a significant blow to corporate climate action and a sign of cowardice from banking executives. For others, it is a welcome end to a performative exercise. These critics contend that the NZBA provided cover for banks to continue financing fossil fuels while claiming climate leadership, and its demise clears the way for a more honest conversation about the need for binding financial regulation.