UN-Backed Net-Zero Banking Alliance Shuts Down After Major Exits
The Net-Zero Banking Alliance (NZBA), a UN-backed initiative aimed at reducing banks' carbon footprint, has announced its immediate shutdown. The alliance, which once boasted nearly 150 members, had been losing traction since late 2020, following a wave of high-profile exits from us bank and pnc bank members.
The NZBA was launched in 2020 with the goal of getting banks to reduce their carbon footprint by 2050. However, the initiative faced setbacks following the election of Donald Trump in 2016. Six major US banks, including JPMorgan Chase and Goldman Sachs, quit the alliance in response. Barclays was another notable departure, leaving the NZBA in August 2021.
The NZBA paused its activities in late August 2021, awaiting a member vote. This vote ultimately led to the decision to transition the initiative into a framework and cease operations immediately. ShareAction, a responsible investment NGO, lamented the end of the NZBA, urging senior bankers to push for higher climate accountability standards. Despite the shutdown, banks can still use the NZBA's 'Guidance for Climate Target Setting for Banks' for their net-zero transition plans.
The NZBA's shutdown marks a significant shift in the banking sector's approach to climate change. While the initiative's end is disappointing, banks can still draw on the NZBA's guidance as they work towards net-zero targets. The future of banking's role in combating climate change remains uncertain, but ShareAction has called on senior bankers to step up and push for higher climate accountability standards.
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