The world’s largest climate alliance for banks suspended operations Wednesday and will ask remaining members to vote on whether the organization should continue to exist, marking a dramatic collapse for a group that once represented the financial industry’s commitment to fighting climate change.
The Net-Zero Banking Alliance announced it would halt activities after North American banks abandoned the group en masse, with departures now spreading to institutions in Japan, Australia and Europe. The alliance, formed in 2021, had initially attracted the world’s biggest banks to pledge alignment with net-zero emissions goals by 2050.
The suspension comes after a cascade of high-profile exits that began with major Wall Street institutions. Goldman Sachs, Wells Fargo, Citigroup, Bank of America, and Morgan Stanley all abandoned the alliance in recent months, with JPMorgan Chase widely expected to follow suit.
The departures followed intense political pressure in the United States, where Republican lawmakers and state officials accused the alliance of anti-competitive behavior against fossil fuel companies. Multiple GOP-led states threatened legal action and imposed restrictions on financial firms participating in climate initiatives.
According to industry reports, US banks faced significant political pressure from Republican officials who viewed the climate alliances as collusion against energy companies. Several states imposed bans or restrictions on conducting business with financial firms that joined such initiatives.
European banks that departed cited the diminished value of the alliance as a global forum after North American institutions withdrew. Speculation had grown that major European banks, including BNP Paribas, were also reconsidering membership.
Critics questioned the alliance’s effectiveness from the start. “The reality is NZBA never truly challenged the fossil fuel-oriented business models of major banks,” said Lucie Pinson, founder of climate nonprofit Reclaim Finance.
Data compiled by Bloomberg shows that since the 2015 Paris Agreement, banks globally provided nearly $6.4 trillion in financing to oil, gas and coal companies, compared with about $4.3 trillion for green energy projects.
The alliance initially required members to align financing operations with limiting global warming to 1.5 degrees Celsius. However, facing member departures, the group dropped that requirement earlier this year in an unsuccessful attempt to stem the exodus.
Most departing banks said they would maintain internal climate commitments and continue supporting clients’ transitions to lower-carbon business models, even without formal alliance membership.
The Net-Zero Banking Alliance now proposes transforming into an advisory body without formal members, hoping to continue providing guidance to banks worldwide on climate transition efforts.
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