Brandon Lee
The Net-Zero Banking Alliance (NZBA) is a global coalition of banks that have committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions targets by 2050. The NZBA was founded in 2021 under the United Nations Environment Programme Finance Initiative and is made up of over 120 banks from 44 countries, representing more than $47 trillion in assets. The alliance provides a framework, guidance, and peer learning opportunities to support members in setting and achieving credible science-based net-zero targets. However, the NZBA has faced challenges in recent years, with several high-profile banks, including some of the largest U.S. banks, withdrawing their membership due to various factors such as political pressure and concerns over the effectiveness of the alliance. Despite these setbacks, the NZBA remains a significant initiative in the transition to a sustainable and inclusive economy.
| Characteristics | Values |
|---|---|
| Founding year | 2021 |
| Founding members | 43 banks |
| Current members | 128 banks |
| Total assets | $47 trillion |
| Chair of the Steering Group | First Abu Dhabi Bank (FAB) |
| Recent exits | HSBC, Barclays, six major US banks, five Canadian banks |
| Purpose | Supporting banks in leading on climate mitigation in line with the Paris Agreement goals |
| Objective | Align lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050 |
| Pledges | More than US$135 billion towards green finance by 2030 |
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What You'll Learn
- The Net Zero Banking Alliance (NZBA) is a global member-led initiative
- It supports banks in leading on climate mitigation
- It is committed to aligning lending, investment, and capital markets activities with net-zero emissions by 2050
- The NZBA has faced a series of departures from banks
- The NZBA provides a framework, guidance, and peer learning opportunities to support members
The Net Zero Banking Alliance (NZBA) is a global member-led initiative
Member banks of the NZBA commit to transitioning all operational and attributable greenhouse gas (GHG) emissions from their lending and investment portfolios to align with pathways to net-zero by 2050 or sooner, consistent with a maximum temperature rise of 1.5°C. They also commit to using decarbonization scenarios from credible and well-recognized sources, prioritizing efforts with the most significant impact, and setting 2030 financed emissions targets.
The NZBA provides a framework, guidance, and peer learning opportunities to support members in designing, setting, and achieving credible science-based net-zero targets. The alliance is led by a Steering Group, which represents the member banks, and works to advance the Paris Agreement climate goals through their financing activities.
However, the NZBA has faced challenges with a series of departures from major U.S., Canadian, and other banks, due to political pressure and concerns over the effectiveness of the alliance without some of the world's biggest lenders as members. Despite these setbacks, the NZBA remains a significant initiative supporting banks in their transition to net-zero and continues to work towards its climate goals.
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It supports banks in leading on climate mitigation
The Net-Zero Banking Alliance (NZBA) is a global initiative supporting banks in leading on climate mitigation. It was founded in 2021 by the UN Environment Programme Finance Initiative and is led by banks under the umbrella of the United Nations. The NZBA is a group of leading global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
The NZBA provides a framework, guidance, and peer learning opportunities to support members in designing, setting, and achieving credible science-based net-zero targets. The alliance had initially required its members to commit to transitioning operational and attributable greenhouse gas emissions from their lending activities to net-zero pathways by 2050 and to set 2030 financed emissions targets. However, due to a series of departures, the NZBA has since dropped this mandatory requirement.
The exodus of banks from the NZBA has been influenced by political pressure, particularly in the United States, where politicians have warned financial institutions of potential legal violations from participating in climate-focused coalitions. This has resulted in a diminished reputation for the NZBA and an increased risk of climate impacts on the remaining banks and society.
Despite the setbacks, the NZBA remains a significant initiative supporting climate mitigation action by banks. It provides practical support to banks navigating the net-zero transition and unlocking opportunities for financing decarbonization. The alliance offers insights and resources to help member banks develop and execute their individual net-zero strategies for financing the transition to a sustainable economy.
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It is committed to aligning lending, investment, and capital markets activities with net-zero emissions by 2050
The Net-Zero Banking Alliance (NZBA) is a coalition of banks that are committed to aligning their lending, investment, and capital markets activities with net-zero emissions targets by 2050. This means that they aim to bring down the emissions from their lending and investment portfolios to net-zero, in line with the Paris Agreement climate goals. The NZBA provides a framework, guidance, and peer learning opportunities to support its member banks in achieving these targets.
At its launch in 2021, the NZBA had over 40 member banks, which rapidly expanded to over 140 banks representing $74 trillion in assets by 2024. However, since then, several high-profile banks, including some of the biggest banks in the US, have withdrawn from the alliance. This has led to a decrease in the number of member banks to 128, representing $47 trillion of assets. Despite this setback, the NZBA remains the largest global initiative specifically focused on supporting climate mitigation action by banks.
The commitment to net-zero emissions by 2050 involves transitioning all operational and attributable greenhouse gas emissions from lending and investment activities to net-zero pathways. This includes a focus on key emissions-intensive sectors and the use of decarbonization scenarios from credible and well-recognized sources. Member banks are also encouraged to prioritize efforts where they can have the most significant impact.
The NZBA is led by banks under the umbrella of the United Nations, specifically the UN Environment Programme Finance Initiative. It is part of a bigger alliance called the Glasgow Financial Alliance on Net Zero (GFANZ). The NZBA plays a crucial role in driving sustainable development and supporting global efforts to combat climate change. By integrating sustainable practices into their operations, banks can enhance their long-term resilience and foster a more inclusive and sustainable economy.
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The NZBA has faced a series of departures from banks
The Net-Zero Banking Alliance (NZBA) is a coalition of banks that aim to bring down emissions from their lending and investment portfolios to net-zero by 2050. It was founded in 2021 and has since grown to include over 140 banks representing $74 trillion in assets. However, the NZBA has recently faced a series of departures from banks, including some of the biggest banks in the US and Canada.
In December 2024 and January 2025, six major US banks withdrew from the NZBA, including J.P. Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs. This was followed by the departure of five Canadian banks. These exits have had a significant impact on the NZBA, as these banks represented a large chunk of assets under management and have diminished the reputation of the alliance.
The reasons for the departures vary but are largely due to political pressure, particularly in the US, where Republican politicians have been warning financial institutions of potential legal violations from participating in climate-focused coalitions. There has also been pressure from the Trump administration, which has pushed for higher production of oil and gas, causing a climate backlash.
The NZBA has since released revised guidelines for members, softening the language from its previous guidelines, which included mandatory requirements for banks to align their lending and investment activities with net-zero targets. Despite these changes, the NZBA continues to face challenges, with more banks withdrawing from the alliance, including Barclays and HSBC.
The departures from the NZBA have raised concerns about the commitment of banks to addressing climate change and the potential impact on the transition to a clean energy future. It remains to be seen whether these banks will continue to finance fossil-fuel-based power generation and related projects, or if they will find other ways to prioritize sustainability and combat climate change.
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The NZBA provides a framework, guidance, and peer learning opportunities to support members
The Net Zero Banking Alliance (NZBA) is a global member-led initiative that supports banks in leading climate mitigation efforts in line with the Paris Agreement's goals. It was founded in 2021 by the UN Environment Programme Finance Initiative and has since grown to include over 120 banks, representing more than $47 trillion in assets.
The framework provided by the NZBA offers a structured approach to help banks identify, assess, and manage climate-related risks and opportunities. It includes guidelines, methodologies, and tools specifically designed to support banks in their transition to net-zero. By providing a clear roadmap, the NZBA framework helps members set meaningful targets, track their progress, and identify areas where they can have the most significant impact.
The guidance offered by the NZBA goes beyond mere target setting. It provides members with practical support and resources to integrate sustainability into their operations and strategies. This includes guidance on developing and executing individual net-zero strategies, aligning lending and investment portfolios with net-zero pathways, and facilitating access to capital for low-carbon initiatives. The NZBA also offers insights on unlocking opportunities and demonstrating progress, helping members to navigate the complexities of the net-zero transition.
Peer learning is a critical aspect of the NZBA's support structure. It facilitates knowledge sharing and collaboration among its members, enabling them to learn from each other's experiences and best practices. Through networking events, webinars, and working groups, members can connect with peers, exchange ideas, and explore innovative solutions. This peer-to-peer learning enhances the sense of community within the NZBA, fostering a collaborative environment that accelerates the transition to net-zero banking.
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Frequently asked questions
The Net Zero Banking Alliance (NZBA) is a group of leading global banks that have committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050.
The purpose of the NZBA is to support banks in leading on climate mitigation in line with the goals of the Paris Agreement. The Alliance provides a framework, guidance, and peer learning opportunities to help members design, set, and achieve credible science-based net-zero targets.
The number of banks in the NZBA has fluctuated since its founding in 2021. Initially, the Alliance had 43 member banks, which expanded to over 140 banks representing $74 trillion in assets by 04/2024. However, following the departure of several high-profile banks, including some major U.S. and Canadian banks, the Alliance now stands at 128 banks, representing $47 trillion in assets.
