Net-Zero Banking Alliance Disbands as Banks Shift Climate Focus
The Net-Zero Banking Alliance (NZBA), launched in 2021 to encourage banks to reduce their carbon footprint, has announced its cessation of activities. Swiss bank UBS, the latest to withdraw, cited a less favorable climate protection context in Europe and the US. The NZBA, which once boasted nearly 150 members, will leave behind its work and guidelines for global use.
The NZBA's decline began in 2016 when several major banks, including Goldman Sachs, Wells Fargo, and JPMorgan Chase, left the alliance following the election of Donald Trump. These banks, along with others from the US, Canada, and Japan, sought to avoid political backlash, particularly from Republican politicians opposed to restricting fossil fuel financing. Despite their departure, these banks maintained their support for climate goals independently.
The NZBA's initial objectives were diluted in the spring of 2022. 'Directives' became 'guidelines' and 'requirements' became 'recommendations', potentially weakening the alliance's impact.
The NZBA's cessation marks a shift in the banking sector's approach to climate change. While the alliance's work and guidelines will continue to be used, the responsibility for transitioning to a carbon-neutral economy now lies more directly with individual banks. The future of banking's role in climate protection remains uncertain.
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