The Great Net Zero Banking Disaster

The Net Zero Banking Alliance (NZBA) is a global initiative, launched in 2021 under the United Nations Environment Programme Finance Initiative (UNEP FI), that brings together leading banks committed to aligning their lending, investment and capital market portfolios with net-zero emissions targets by 2050.  NZBA acts as a forum for banks to collaborate, share best practices, co-ordinate investment strategies and learn from each other’s approaches.

A number of major banks have recently withdrawn their support for NZBA:

HSBC announced its withdrawal in July 2025, citing governance and operational autonomy concerns.

Barclays exited in August 2025, mentioning the loss of major NZBA members and a shift in industry priorities as key factors.

UBS withdrew in August 2025, citing a need to pursue climate targets independently and noting that many global peers had already exited.

JPMorgan Chase departed in July 2025 amid growing regulatory and political pressure in the US, including concerns about legal risk and anti-ESG (Environmental and Social Governance) sentiment.

Morgan Stanley left the alliance in December 2024, citing political and customer backlash along with increased regulatory scrutiny of the Renewable Energy Market.

Bank of America withdrew in January 2025, due to preference for independent target-setting and opposition to alliance governance.

Some Canadian banks and most major Wall Street financial institutions have also left the NZBA in 2025 amid similar concerns. Speculation continues that other large European banks—such as BNP Paribas (France), Deutsche Bank (Germany), Santander (Spain), UniCredit (Italy), and Commerzbank (Germany)—may follow.

In short, the major international banks and global financial institutions are backing away from involvement in the Net Zero Banking Alliance, adding to the growing sense of uncertainty about the future of Renewables as an investment.