‘Net-Zero Banking Alliance’ suspends activities

Written by Business Standard on September 3, 2025. Posted in Current News

The Net-Zero Banking Alliance, which has been virtually wiped off the North American map and is now starting to lose ground in Japan, Australia and Europe, is asking remaining signatories to decide whether the group should continue to exist as a membership-based organization, according to a statement last Wednesday.

The announcement comes four years after the group’s founding members, which included the world’s biggest banks, stated their commitment to aligning their lending and investment portfolios with achieving net zero ‘greenhouse gas’ emissions by 2050.

The reality is NZBA “never truly challenged the fossil fuel-oriented business models of major banks,” said Lucie Pinson, the founder of climate nonprofit Reclaim Finance.

“For those working to protect the environment and the climate, this underlines once again the limits of voluntary corporate commitments and the urgent need for binding measures, including strong regulatory action, to trigger real change,” Pinson said.

Since the unveiling of the Paris Agreement at the end of 2015, banks globally have provided almost $6.4 trillion of bonds and loans to ‘carbon’-intensive businesses, compared with about $4.3 trillion for ‘green’ projects, according to data compiled by Bloomberg.

“The Steering Group believes this is 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,” NZBA said in the statement.

The proposed model will also facilitate ongoing “engagement with the global banking industry to develop further guidance and tools needed to support them and their clients,” it said.

More recently, HSBC Holdings Plc has led the way with Barclays Plc and UBS Group AG following it out of NZBA in August.  

But in an effort to stop members from leaving, it dropped that requirement earlier this year.

Most banks leaving the alliance have said they plan to continue helping clients transition toward a low-‘carbon’ economy, and most have held on to internal ‘net zero’ commitments. 

The alliance “encourages the banking sector to remain steadfast” in implementing its ‘net zero’ commitments, NZBA said.

Bloomberg has previously reported that BNP Paribas SA, the EU’s biggest bank by assets, was questioning the value of continued NZBA membership as recently as June.

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