In a stunning reversal for corporate climate action, the Net Zero Banking Alliance (NZBA) has announced its immediate termination. Once a global coalition of nearly 150 banks, the UN-backed group has been forced to shut down after a critical mass of its members departed. The alliance’s guidance will remain online, but the collective project is over.
The story of the NZBA’s collapse is fundamentally a political one. The turning point was the re-election of Donald Trump, whose administration promised to unleash domestic fossil fuel production and roll back environmental rules. This created a chilling effect, as US banks feared being targeted by right-wing politicians for their involvement in climate initiatives, which were increasingly framed as “anti-American” or “woke.”
Six major US financial institutions, from Wells Fargo to Goldman Sachs, acted swiftly, pulling out of the alliance before Trump’s inauguration. This strategic retreat was designed to shield them from political backlash but simultaneously gutted the NZBA of its most influential members, fatally wounding the initiative.
The shockwave was felt globally. With the US banks gone, European and Japanese lenders began to reconsider their participation. The alliance’s authority crumbled further when HSBC, which had already diluted its own climate targets, became the first British bank to leave, with Barclays close behind. The alliance could not survive such high-profile defections.
For activists, the end of the NZBA is a moment of reckoning. Jeanne Martin of ShareAction lamented the decision as “bitterly disappointing,” a failure of corporate courage. Conversely, Lucie Pinson of Reclaim Finance celebrated the end of what she called a “doomed” charade. She insists the focus must now be on regulatory action, arguing that the massive reallocation of capital needed to fight climate change can only be achieved through government intervention.