After four years, the banking industry’s signature joint effort to advance Paris Agreement-aligned climate targets is no more. The roughly 120 members of the Net Zero Banking Alliance (NZBA) said on Oct. 3 they will stop work immediately.
Their decision was no shock to many watching the group contract over the past 11 months. The alliance had been on hold since Aug. 27 pending a collective decision about its fate.
But the permanent end sparked both outrage and resignation from activists, with some calling financial institutions cowards for folding to anti-ESG pressure by President Donald Trump and legal threats by Republican lawmakers. Other experts, however, insisted that the alliance’s closure reflects climate finance moving into a new, action-oriented stage.
Whatever the case, the blush of excitement had long worn off since the banking alliance launched in 2021 under the United Nations-backed Global Financial Alliance for Net Zero (GFANZ). At its peak, the NZBA included more than 140 members in more than 40 countries. In December, JPMorgan Chase triggered an exodus that resulted in departures by the biggest U.S. and Canadian banks, as well as HSBC, Barclays and UBS of Europe.
By January, the GFANZ umbrella group had restructured, weakening itself. Many of its eight sub-organizations lowered their original ambitions. (The Net-Zero Insurance Alliance disbanded completely in 2024.)
‘Doomed to fail’
“We won’t mourn the NZBA,” said Lucie Pinson of Reclaim Finance, a Paris nonprofit that lambasted banks for financing fossil fuels twice as much as it backs cleaner alternatives. “Like other financial alliances of its kind, it brought little — if anything — to the climate, and was doomed to fail. Its purpose was never to take real action, but to create the illusion of measures in order to ward off the risk of regulation.”
The group urged policymakers and regulators to force the issue — that is, to stymie the oil and gas industry while boosting sustainable alternatives. Over the past nine years, the biggest banks in the world have forked out $7.9 trillion to Big Oil, according to the Banking on Climate Chaos report that Reclaim Finance produced with the Sierra Club, Bank Track and other nonprofits.
“Senior bankers need to be far more courageous in this decisive moment for all our futures and must use their influence to push up standards for accountability on climate if we are to stand any chance of making the clean energy transition happen,” stated Jeanne Martin, co-director of corporate engagement at ShareAction, who called the banking alliance’s cessation “bitterly disappointing.”
‘Good news overall’
The NZBA’s contraction reflected an evolution from “collective action to collective learning,” according to Brian O’Hanlon, managing director of climate-aligned finance at the Rocky Mountain Institute in Washington, D.C.
For example, bank financing is beginning to tilt in favor of low-carbon energy, according to Bloomberg New Energy Finance in January. For every dollar in 2023 that fueled high-carbon fuels, 89 cents supported cleaner wind and solar or grid technologies,