Net-Zero Banking Alliance drops its climate goal (2025)
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The Net-Zero Banking Alliance (NZBA) removed its mandatory requirement that members align their lending and investments with the Paris Agreement's climate goal of no more than 1.5 degrees of warming this century.
NZBA saw the departure of all large American banks in early 2025, as well as those from other countries around the world. The decision to drop the climate goal is part of the organization’s effort to align with the Republican administration now in office.
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After rapidly expanding from 43 banks at launch in 2021 to over 140 banks representing $74 trillion in 2024, members of the group have come under significant pressure, particularly from Republican politicians in the U.S., who have been warning financial institutions including banks, insurers, asset owners and investors of potential legal violations from their participation in climate-focused alliances and of plans to exclude the companies from state business, as part of a broader anti-ESG political campaign. Following the departure of several high-profile banks, the alliance currently stands at 128 banks, representing $47 trillion of assets. Alongside the announcement, the NZBA released revised guidelines for members, significantly softening the language from its 2024 guidelines which had included a series of mandatory requirements for banks. Among the most notable changes, the 2024 guideline stated that “banks shall set a 2050 target to support meeting a 1.5°C by end of century outcome and a net-zero by 2050 goal,” with an explanation that this was “mandatory, on a comply-or-explain basis,” while the updated document includes a “recommendation” that states that “banks should set a 2050 target to support meeting a net-zero goal and the goals of the Paris Agreement.” (emphasis added by ESG Today). The NZBA noted that the changes were made in response to a “new reality” in which “the external landscape for banks has rapidly changed,” with the organization’s next phase aimed at “supporting member banks to progress against their individual climate-related strategies,” and helping banks to “address constraints on green growth by working with their clients to advance policies that stimulate markets and unlock opportunities for investment.”[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
External links
Footnotes
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
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