Net Zero Banking Alliance Pauses Activities and Proposes Membership Restructuring

The UN-backed Net-Zero Banking Alliance has paused its activities and initiated a member vote on transitioning from a membership-based alliance to a framework initiative, following a series of high-profile departures that has hollowed out its membership. The NZBA had grown to over 140 banks representing $74 trillion before departures began in late 2024.

Departures from the NZBA began with Goldman Sachs in December 2024, followed rapidly by all major Wall Street banks and Canadian counterparts in early 2025. Further changes in April 2025, including eliminating a mandatory 1.5°C alignment requirement for lending and capital markets activities, slowed the exodus temporarily. However, HSBC exited in July, followed by UBS and Barclays in August, with Barclays noting that the organisation no longer has the membership to support transition for global banks. The NZBA proposed converting to a new framework initiative, with a member vote to conclude at the end of September.

The NZBA's restructuring parallels moves by other climate finance coalitions. The Net-Zero Insurance Alliance was discontinued in 2024. The Net Zero Asset Managers initiative announced suspension of its primary activities. The Glasgow Financial Alliance for Net Zero, the umbrella coalition for climate finance alliances, launched a significant restructuring to focus on capital mobilisation rather than membership commitments. Republican political pressure on U.S. institutions warning of potential antitrust violations has been the primary driver of these departures.

The NZBA said its Steering Group believes a framework initiative is the most appropriate model to support banks in remaining resilient and accelerating the real economy transition aligned with the Paris Agreement. The organisation also urged the banking sector to remain steadfast in implementing net-zero commitments regardless of the structural outcome. For Indian banks assessing alignment with international climate finance standards, the NZBA's evolution toward a non-binding framework may reduce formal commitment barriers while preserving access to guidance tools.

Key figure — NZBA grew to over 140 banks representing $74 trillion before departures began