The most prominent climate club for the global banking industry, the Net Zero Banking Alliance (NZBA), has been disbanded. Following a mass exodus of its members, the UN-convened group announced it would cease operations immediately. This leaves a significant vacuum in the landscape of voluntary corporate climate action and raises questions about what will come next.
The alliance’s failure is a stark illustration of how political winds can capsize even well-intentioned corporate initiatives. The re-election of Donald Trump and the subsequent rise of an “anti-ESG” political movement in the US created a climate of fear for American banks. Membership in the NZBA became a liability, exposing them to accusations of engaging in “woke capitalism.”
The tipping point came when Wall Street’s six giants—JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Morgan Stanley, and Goldman Sachs—all quit the group. Their coordinated departure was a body blow that the alliance could not withstand, effectively removing the lynchpin of the entire global effort.
Following the US exit, the alliance’s fate was all but sealed. International banks in Europe and Japan began to follow, and the recent withdrawals of UK heavyweights HSBC and Barclays confirmed the group’s terminal decline. The dream of a united global banking front on climate was over.
Now, the debate turns to the future. Some sustainable finance proponents are disappointed, seeing the collapse as a lost opportunity. However, a growing chorus of critics argues this was a necessary failure. They contend the NZBA was a toothless organization that promoted “greenwashing.” For them, the path forward is clear: the era of voluntary pledges must end, and the era of binding government regulation must begin to curb the financing of fossil fuels.