What Does the NZBA Closure Mean For Banking Climate Targets?
The Net Zero Banking Alliance (NZBA) has been formally shut down, signalling a major change for the banking sector's approach to climate commitments.
The members of the NZBA have voted to transition from a membership-based model to establishing its guidance as a new, publicly available framework initiative.
The closure follows a series of high-profile departures from the NZBA by major global banks. These include:
- 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
A spokesperson for the NZBA stated that members voted to move from a membership-based alliance to “establishing its guidance as a new framework initiative”.
They add: “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.”
The exits could be attributed to several factors, including desires for greater operational autonomy, concerns over legal exposure and increasing regulatory and political pressure.
Assessing the financial and political pressures on banks
The NZBA was a global initiative designed to encourage banks to align their financing portfolios with net zero greenhouse gas emissions by 2050.
It provided resources and a framework for setting science-based targets in line with the Paris Agreement.
This included guidance on methodologies for data management and rules for members to follow, such as aligning both operational and financed emissions with pathways to 2050, setting 2030 targets and publishing emissions data annually.
In the US, particularly in Republican states, substantial political pressure has been placed on financial institutions and climate alliances. Some banks faced threats of antitrust lawsuits over accusations of “boycotting” fossil fuels.
These investigations were reportedly shelved after the US banks exited the NZBA. During Climate Week NYC, Satya Tripathi, Former Secretary of the UN’s Environment Management Group, called on banks to “stand up for what they believe in” and not bow to political pressure.
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.”
Scrutinising accountability after the NZBA's collapse
The decision to dismantle the NZBA has prompted criticism from some organisations.
Jeanne Martin, Co-Director of Corporate Engagement at ShareAction, explains: “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.”
She cites the tangible impacts of climate change on the wider economy, saying: “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.” She also highlighted the gap between corporate action and public and investor sentiment.
“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."
Navigating a landscape of declining influence
The influence of the NZBA had been visibly waning before its closure. According to reports in November 2024, the NZBA represented 140 member banks with total banking assets of US$75.5tn.
By August 2025, this figure had fallen to US$42.2tn following the exits of HSBC, Barclays and UBS.
In its August announcement, Barclays stated that with the departure of most global banks, the NZBA no longer had the membership to “support our transition”.
The NZBA was established in 2021 as part of the Glasgow Financial Alliance for Net Zero (GFANZ). Following a restructuring this year, the NZBA is no longer associated with any of the net zero alliances for banking, insurance and asset owners.
This follows a similar pattern to the Net-Zero Insurance Alliance, which disbanded and rebranded last year after several large insurers departed.
The dissolution of the NZBA leaves financial institutions to navigate their climate strategies more independently, facing a complex landscape of political risk, legal challenges and stakeholder expectations.
