The Net Zero Banking Alliance (NZBA), once hailed as a major step forward for climate-conscious finance, has closed shop. The UN-backed group, which sought to get banks to commit to decarbonizing their portfolios, announced its immediate dissolution. The decision came after the alliance was hollowed out by the departure of dozens of its members.
Many observers are pointing to a direct cause: the return of Donald Trump to the White House. His administration’s pro-fossil fuel stance and the broader “anti-ESG” campaign from US conservatives made membership in the NZBA a political liability. Banks became wary of being labeled “woke” and facing potential legislative or regulatory backlash.
The first dominoes to fall were the biggest. Wall Street’s six financial giants, from Bank of America to Wells Fargo, all pulled out in a coordinated move late last year. This was widely interpreted as an act of political self-preservation, but it effectively sounded the death knell for the international alliance by removing its most significant participants.
The ripple effect was inevitable. With US banks out, European and Japanese counterparts began to see little point in remaining. The final chapter was written this summer when British stalwarts HSBC and Barclays also tendered their resignations, leaving the NZBA untenable. HSBC’s move was particularly notable, as it had already been criticized for watering down its internal climate goals.
The post-mortem has been contentious. Campaigners at ShareAction decried the news as “bitterly disappointing,” blaming a lack of courage among banking executives. In stark contrast, Lucie Pinson of Reclaim Finance said she “won’t mourn” the alliance, calling it an instrument for public relations, not real action. She argued its failure makes the case for regulatory intervention undeniable, stating that ending fossil fuel financing requires laws, not voluntary clubs.