Net-Zero Banking Alliance ceases operations, industry guidelines remain

The Net-Zero Banking Alliance (NZBA) , the UN-backed international banking coalition dedicated to advancing net-zero goals through lending activities, will close . The immediate cessation of operations follows a vote by member banks announced in late August . The initiative, launched in 2021 with the goal of aligning bank lending emissions with net-zero pathways by 2050, had experienced rapid expansion, growing from 43 founding members to over 140 banks by 2024, with total assets of $74 trillion.

In recent months, however, the alliance had suffered a series of defections by large banking groups: starting with the exit of Goldman Sachs in December 2024, followed by giants such as JP Morgan, Citigroup, Morgan Stanley, Bank of America and Wells Fargo, as well as Canadian institutions, and finally arriving at HSBC, UBS and Barclays.

Despite attempts in recent months to limit the number of departures by amending certain rules, including eliminating the requirement to align lending and capital markets activities with the goal of limiting global warming to 1.5°C and introducing more flexible deadlines, the remaining banks have now decided to significantly restructure the initiative. From a membership-based alliance, the Net Zero Banking Alliance is now simply a framework aimed at providing banks with guidance for setting decarbonization targets and supporting their climate transition plans.

The alliance has therefore published its Guidelines for Climate Target Setting for Banks , which will remain available as a reference for banks interested in developing and implementing net-zero strategies. Some argue that the closure of the NZBA does not represent a step backward in climate action, but rather a pragmatic restructuring of the sector, which could foster broader participation, especially among banks in emerging markets and countries in the Global South, with a greater focus on practical implementation and dialogue with regulators.

The closure of the NZBA comes amid broader challenges for climate-focused financial coalitions formed under the umbrella of the Glasgow Financial Alliance for Net Zero (GFANZ), such as the Net-Zero Insurance Alliance, which was dissolved in 2024, and the Net Zero Asset Managers Initiative, which scaled back its targets following political and regulatory pressure.