Zeroing Out: NZBA Members Vote to Halt All Activities
6 October 2025
The Net-Zero Banking Alliance (NZBA) has voted to immediately cease operations and instead shift to a guidance-based model, marking a further blow to attempts to curb climate change.
The alliance’s overhaul in approach was announced on Friday following a vote from members on a proposed transition from a membership-based alliance to establishing its guidance as a new framework initiative. The vote was announced at the end of August alongside a suspension of operations following several further high-profile departures of banks from the NZBA, as reported by Minerva Analytics.
In its final statement announcing the immediate cessation of operations, the NZBA said that individual banks worldwide can continue to use and reference these resources to “help develop and deliver on their own net-zero transition plans”. Separately, a spokesperson for the NZBA reportedly said that the vote also “provided a mandate to explore how best to carry this work forward”, with banks to be involved in the process of developing further plans over the next six to 12 months.
Convened by the United Nations Environmental Programme Finance Initiative (UNEP FI), the NZBA’s primary objective was to provide guidance and support to banks in reducing portfolio emissions to net zero by 2050. More than 120 banks from 40 different countries had joined the alliance since its 2021 inception.
When announcing the pause of activities in August, the NZBA Steering Group stated that transitioning into a framework initiative was the “most appropriate model to continue supporting banks across the globe to remain resilient and accelerate the real economy transition in line with the Paris Agreement, as well as to continue engagement with the global banking industry to develop further guidance and tools needed to support them and their clients”. The alliance also urged the banking sector to “remain steadfast in implementing their net zero commitments”.
UNEP FI has issued a new fourth version of its “Guidance for Climate Target Setting for Banks”, which financial institutions are “encouraged” to use given that it has been developed to support banks’ climate transitions and establish good practice. The first version of this guidance was launched in April 2021, with a second version issued in April 2024 and later a third in April 2025 which is now replaced by this fourth version.
The third version of the guidance published in April saw the NZBA update its climate target-setting guidelines for banks following the high-profile exit of many US and Canada-based organisations. The most significant and controversial change in the update was eschewing a prior requirement for banks to strictly target limiting global temperature rise to 1.5°C, seemingly an attempt to staunch the flow of departures from the alliance.
This also appeared to backfire, however, with Dutch bank Triados quitting the alliance due to the stripping back of its standards, and it failing to prevent banks from leaving the NZBA against the backdrop of heightened political pressure and regulatory scrutiny. Pressure on banks from the right wing, particularly in the US, began to mount in the second half of last year and has only intensified since the re-election of Donald Trump in November.
Goldman Sachs was the first high-profile bank to publicly exit NZBA, triggering several further departures ahead of Trump’s January inauguration. Wells Fargo, Bank of America and Citigroup left the alliance before the end of 2024, while Morgan Stanley and JP Morgan jumped ship in the first week of January.
The US banks were joined by Canada’s six largest banks – Bank of Montreal, the Canadian Imperial Bank of Commerce, National Bank of Canada, TD Bank, Royal Bank of Canada and Scotiabank – had also announced their exits from NZBA by the end of January.
More recently, UBS left the NZBA in August citing its strengthened in-house capabilities to achieve sustainability- and climate-related objectives since becoming involved with the alliance in 2021. Barclays also exited the alliance at the start of August, while HSBC departed in July.
The exit of Canadian, European, UK and US banks from NZBA suggests that the impact of Trump and Republicans’ campaign against ESG and related topics is spilling over borders and is being felt on a global scale.
After the Bank of America, JP Morgan, Morgan Stanley and Wells Fargo exited the NZBA, Texas Attorney General Ken Paxton ended probes he had previously launched into the banks. This year, Texas and Paxton have prominently targeted asset managers and proxy advisors in addition to banks over their ESG and climate commitments, as reported by Minerva Analytics.
The NZBA’s sister organisation the Net Zero Asset Managers initiative (NZAM), which was also established by UNEP FI, suspended activities in January following the widely publicised exit of BlackRock. As reported by Minerva Analytics, at the time NZAM had said it would review the initiative to ensure that it was still fit for purpose in the “new global context”. No news on the NZAMs website has been published since the news was announced at the start of this year, though the initiative is due to issue an updated commitment statement to signatories before the end of this year.
UNEP FI’s newly launched fourth version of Guidance for Climate Target Setting for Banks stated that the banking industry has a key role in tackling the climate crisis challenge. “While banks alone cannot solve the climate crisis, they can act as part of the broader ecosystem to support the reduction of greenhouse gas emissions by engaging with and providing financial solutions, wherever possible, to their clients and partners as they seek to transition to a low-carbon economy,” the document read.
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Last Updated: 6 October 2025