Net Zero Banking Alliance pauses work as bank defections trigger search for new role

Following a wave of defections from major banks, the Net Zero Banking Alliance is to pivot from a membership-based organisation to a ‘framework initiative’, according to Finextra.

The transition follows a stunning loss of confidence in the initiative as major banks from across the US and Europe stepped down in the light of new political positioning on climate change, led by US president Donald Trump.

The alliance, established in 2021 ahead of climate talks in Glasgow, originally required members to commit to reaching net-zero emissions by 2050, set interim emission-reduction targets for carbon-intensive sectors by 2030, and submit annual progress reports.

At its peak it had around 150 members, including most of the world’s largest banks. However, that number has dwindled in the last few months, beginning with a mass exodus by US banks and a steady trickle of European institutions.

With major banks backing away from the commitment, the NZBA has paused activities while it awaits a vote on its proposed change of role.

The official press release:

As a member-based organization, the Net-Zero Banking Alliance (NZBA) is committed to supporting banks address the impacts of climate change and associated economic impacts. Responding to member input, the NZBA Steering Group has, on 27 August 2025, initiated a member vote to decide on a proposed transition from a membership-based alliance to establishing its guidance as a new framework initiative. The outcome of the vote will be shared at the end of September, 2025.

The Steering Group believes this is the most appropriate model to continue supporting banks across the globe to remain resilient and accelerate the real economy transition in line with the Paris Agreement, as well as to continue engagement with the global banking industry to develop further guidance and tools needed to support them and their clients.

Recognizing there is major opportunity for banks and key stakeholders to build on the Alliance’s outputs and to accelerate action on key priorities, NZBA encourages the banking sector to remain steadfast in implementing their net-zero commitments.

NZBA has paused its ongoing activities while members complete the current voting process and will share the outcome once voting concludes at the end of September.