On August 27, the Net-Zero Banking Alliance (NZBA) announced that its Steering Group has initiated a membership vote to determine whether to transition from its current “membership-based alliance” model to establishing its guidelines as a new framework initiative. The NZBA has suspended its ongoing activities, with the vote results to be announced by the end of September 2025.

The NZBA Steering Group believes this represents the most appropriate model to continue supporting global banks in maintaining resilience and accelerating the transition of the real economy in line with the Paris Agreement. It will also facilitate ongoing collaboration with the global banking sector to develop further guidance and tools supporting banks and their clients.

Should the proposal pass, the NZBA will shift its focus toward publishing goal-setting methodologies and industry best practices for the global banking sector, rather than maintaining traditional “member commitment management.” This move is widely seen as a strategic retreat under pressure from a significant number of founding members withdrawing.

This pivot comes amid a sharp decline in alliance membership. Since late 2024, a wave of withdrawals has unfolded, with major international banks including JPMorgan Chase, Morgan Stanley, Citigroup, Bank of America, Goldman Sachs, Wells Fargo, HSBC, Barclays, and UBS successively announcing their exits from the NZBA.

External observers widely attribute this exodus to political pressure—particularly criticism from the United States—alongside concerns among some members about antitrust risks.

While announcing their exits, some banks reaffirmed their “net-zero by 2050” commitments and emphasized they would continue independent sustainable finance and carbon reduction financing efforts. However, the NZBA's weakening is also seen as a ‘rebalancing’ of the global banking industry's climate change pledges, signaling a shift from “alliance endorsement” toward “individual exploration” and “framework reference.”

Overall, the exit wave stems from multiple complex factors:

1. Antitrust legal risks (primary cause): This is the most frequently cited “force majeure.” Banks fear that coordinated actions through alliances to jointly restrict financing for high-emission industries (such as fossil fuels) could be viewed by regulators—particularly the U.S. Department of Justice—as group boycotts or collusive behavior, exposing them to significant antitrust litigation risks.

2. Geopolitical and Policy Pressure: Particularly in the U.S., climate issues have become increasingly politicized. Banks face pressure from certain politicians to avoid participation in international alliances perceived as potentially restricting the development of the American energy sector.

3. Reputation and Greenwashing Risks: Stringent commitments entail rigorous accountability. Some banks may wish to avoid accusations of greenwashing and reputational damage stemming from failure to meet mid-term targets.

4. Internal Capabilities Mature: Institutions like UBS indicate that after years of development, they have established mature internal net-zero transition frameworks and teams, reducing reliance on external alliances for guidance and constraints.

The future trajectory of the NZBA hinges on the outcome of the September vote. Potential shifts for the NZBA could imply:

1. Individual Bank Accountability: The focus on achieving net-zero emissions may shift toward individual banks' independent efforts and commitments rather than unified alliance constraints.

2. Global Coordination Challenges: The absence of a robust global coordination mechanism could slow the overall pace of the financial sector's support for decarbonizing the real economy.

3. Disclosure and Transparency: Even if the alliance format changes, market demands—particularly from investors and rating agencies—for climate-related disclosures and transparency from financial institutions are expected to persist or even intensify.

This “identity crisis” within the Net-Zero Banking Alliance epitomizes the complexity and twists of the global green transition. It reveals the significant tension between idealistic global goals and the pragmatic realities of legal, political, and economic interests. The retreat from alliance structures does not signal the end of banking sector climate action, but rather marks its entry into a new phase characterized by greater decentralization and a focus on substance over form. Global market attention will shift from “who is in the alliance” to “who is actually taking action.”

Author：Qinger