Net Zero Banking Alliance Disbands as Major Banks Exit
The Net Zero Banking Alliance (NZBA), a UN-led climate-focused banking initiative, has voted to cease operations. This decision follows a series of high-profile exits by major banks, including HSBC, Barclays, and Goldman Sachs.
The NZBA's demise began in July when HSBC pulled out, citing a shift in priorities. Barclays followed suit in August, stating that the group 'no longer has the membership to support our transition'. The exodus accelerated after President Donald Trump's re-election in November 2024. Wall Street banks, including Goldman Sachs, began leaving en masse.
By January, all U.S. banks had departed, with JP Morgan being the last to leave. This marked a total erasure of North American banks from the alliance. Other major banks, such as the Royal Bank of Canada, Bank of Montreal, and Toronto-Dominion Bank, also exited the NZBA. The departure of these banking giants has been linked to a rowing back on environment, social, and governance (ESG) policies.
Standard Chartered's CEO, Bill Winters, criticized peers for ditching their ESG commitments, stating that 'it's not a fad, it's a fundamental shift in the way the world works'.
Following the departure of its last members, the NZBA will cease operations immediately. Instead of a member-based alliance, it will transition to establish its guidance as a framework. This shift comes amidst a broader trend of banks reassessing their climate commitments.
