The Net-Zero Banking Alliance (NZBA) announced that it will cease operations, ending the activities of the UN-backed banking sector coalition dedicated to advancing global net zero goals through their financing activities.

The decision was made following a series of high-profile departures from the coalition, leading to a vote by its member banks to significantly restructure the initiative from a membership-based alliance to a framework providing guidance for banks on setting decarbonization targets, and to support their climate transitions plans.

In a statement provided to ESG Today, an NZBA spokesperson said:

“Members of the Net-Zero Banking Alliance (NZBA) have voted to transition from a member-based alliance and to establish its guidance as a framework… As a result of this decision, NZBA will cease operations immediately.”

The NZBA was launched in 2021, with members committing to transition operational and attributable greenhouse gas (GHG) emissions from their lending activities to align with net zero pathways by 2050, and to set 2030 financed emissions targets, initially focused on key emissions intensive sectors. In April 2024, the group issued new guidelines for climate target setting for banks, expanding its requirements to include a commitment to align capital markets activities such as debt and equity underwriting to banks’ 2050 net zero goals, in addition to the prior lending-focused commitment.

After rapidly expanding from 43 banks at launch in 2021 to over 140 banks representing $74 trillion in 2024, NZBA members came under significant pressure, particularly from Republican politicians in the U.S., who warned 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.

Departures from the group began late last year, with Goldman Sachs announcing a decision to leave the NZBA in December 2024, followed rapidly by all of its major Wall Street peers within a few weeks, and shortly afterwards by their Canadian counterparts in early 2025. Following the departure of the North American banks, the NZBA’s members agreed in April 2025 to a series of significant changes, including eliminating a mandatory requirement for banks to align lending and capital markets activities with the goal of limiting global warming to 1.5°C.

While the defections slowed after the changes in April, high-profile departures from the NZBA resumed this summer, with HSBC leaving the group in July, followed in August by UBS and Barclays, with the latter bank noting that “with the departure of most of the global banks, the organisation no longer has the membership to support our transition.”

Alongside the announcement, the NZBA also published its updated “Guidance for Climate Target Setting for Banks,” outlining key principles for target setting net zero aligned with the Paris Agreement’s objectives.

The NZBA spokesperson added:

“The Guidance for Climate Target Setting for Banks and supporting implementation resources are the most widely used global banking framework focused specifically on setting decarbonisation targets and will remain publicly available.

“Individual banks worldwide can continue to use and reference these resources to help develop and deliver on their own net-zero transition plans.”

While noting that the NZBA announcement “may seem like a setback for global progress,” Gill Lofts, Global Financial Services Sustainable Finance Leader at EY noted that it also presents a new opportunity for banks to drive the net zero transition, reflecting “a pragmatic and transparent reassessment of the scientific, economic and political realities we face today.”

Lofts added:

“This shift is not a retreat from climate action, but a strategic course correction that opens the door to broader global participation, particularly from banks in emerging markets and the global south that were previously unable to meet the commitment. The new framework will foster inclusivity and emphasize implementation through technical capability building and engagement with policymakers – critical foundations for driving real progress.”

The NZBA formed part of a broader coalition of climate-focused financial sector alliances, which have largely faced similar political pressure over the past several months. Other coalitions included the Net Zero Asset Managers initiative (NZAM), Net Zero Asset Owner Alliance (NZAOA), and the Net-Zero Insurance Alliance (NZIA), among others. After several high-profile departures from each group, the NZIA was discontinued in 2024, while  NZAM announced earlier this year that it will suspend its primary activities, as it moves to adapt to a changing political and regulatory environment. The UN-backed Glasgow Financial Alliance for Net Zero (GFANZ), which had acted as an umbrella group for the coalitions, also launched a significant restructuring this year, shifting its focus towards initiatives enabling the mass mobilization of capital to support the low carbon transition.