The world’s biggest climate group for banks, the Net-Zero Banking Alliance (NZBA), is facing a wave of departures. After key banks in the UK and Switzerland left recently, some large European Union banks with strong ties to the U.S. are now considering following suit. These banks worry about being seen as unfairly anti-oil in the U.S., a concern adding to the pressure to leave.
The NZBA was founded in 2021 with the goal of helping banks support the fight against climate change by aligning their financing with net-zero emissions by 2050. It once required members to stick to plans limiting global warming to 1.5 degrees Celsius. But after many North American banks quit earlier this year amid political backlash in the U.S., the alliance softened its rules to keep members on board. Even so, the latest departures unsettle the coalition’s future.
BNP Paribas, the largest bank in the EU by assets, has recently questioned whether staying in the NZBA is worth it. While it has hesitated to make a public exit, it’s reportedly considering delaying any formal decision until the end of the year. Deutsche Bank, Spain’s Banco Santander, UniCredit, and Germany’s Commerzbank have all said they continue to support net-zero goals but have been cautious or vague about their NZBA membership status as they monitor developments.
The alliance’s decline in numbers weakens one of its main advantages: connecting banks to share strategies and push the net-zero transition. Barclays and HSBC quit in the UK not long ago, with Barclays saying the organization no longer offers enough membership support to help its transition.
Those that have left say they remain committed to sustainability. UBS, after its recent exit, emphasized it still supports a low-carbon economy. HSBC reported a jump in sustainable finance deals despite its departure. Still, some clients and investors have pushed back. For example, HSBC lost several environmentally focused customers, and the Church of England’s pension fund is now engaging with banks like Barclays and HSBC to understand their reasons for leaving.
Experts note that banks make decisions based on current market conditions and risk rather than longer-term social goals. Financial institutions aim to maximize returns and may not be the best agents to fix big market problems or lead society’s move to clean energy. This explains why some banks, especially those with large U.S. exposure, are cautious about being caught in political crossfire over fossil fuel financing.
Despite setbacks, the NZBA still counts 125 members worldwide, representing $41 trillion in assets. Banks in Northern Europe, including ING and ABN Amro from the Netherlands and Swedbank and SEB from Sweden, remain proud supporters.
The NZBA’s struggles come as Wall Street banks are pulling back from fossil fuel financing. Top U.S. banks cut their funding for oil, gas, and coal projects by 25% so far this year compared to 2024, signaling a shift even outside climate coalitions.
For now, the future of the alliance is uncertain amid changing politics and market pressures. What remains clear is that banks continue to face a balancing act — juggling climate goals, investor expectations, and the realities of the global energy market.