Following a significant wave of departures among major banks, the Net Zero Banking Alliance (NZBA) is transitioning from a membership-driven organization to a framework initiative.
This shift comes in response to a noticeable decline in confidence in the alliance, particularly after several prominent banks from the US and Europe withdrew due to changing political landscapes surrounding climate change, notably influenced by the policies of former US President Donald Trump.
Initially launched in 2021 ahead of the climate talks in Glasgow, the NZBA required its members to commit to achieving net-zero emissions by 2050. It also set interim targets for reducing emissions in carbon-heavy sectors by 2030 and mandated annual progress reporting. At its height, the alliance boasted around 150 members, including many of the world’s leading banks. However, that figure has significantly decreased in recent months, starting with a mass exit by US institutions and a gradual departure of European banks.
In light of these significant withdrawals, the NZBA has temporarily halted its activities while awaiting a decision on its proposed new framework. The steering committee of the alliance argues that this new model is the most effective way to support banks globally in maintaining resilience and advancing the economic transition in alignment with the Paris Agreement.