The Net-Zero Banking Alliance (NZBA), a UN-backed initiative launched in 2021 to guide banks toward net-zero emissions by 2050, has ceased operations following a significant withdrawal of member institutions. The decision to disband was confirmed after a vote by the remaining members, marking a substantial shift in the banking sector's approach to climate commitments. Once comprising nearly 150 banks globally, the NZBA has faced mounting pressure from political and regulatory changes, particularly in the United States. Canada’s six largest banks — Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Scotiabank, Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada — have withdrawn from the initiative launched in 2021 by former Bank of Canada Governor Mark Carney.The re-election of Donald Trump and subsequent policy shifts led to a wave of departures from the alliance. Major U.S. banks, including JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley, Wells Fargo, and Goldman Sachs, exited the NZBA between late 2024 and early 2025. European institutions such as HSBC and Barclays also followed suit, citing concerns over political backlash and the evolving regulatory landscape, the Guardian reported..Despite the dissolution of the alliance, the NZBA has pledged to maintain access to its resources, including the "Guidance for Climate Target Setting for Banks," which has been instrumental for financial institutions in setting decarbonization targets. These tools will remain publicly available for banks that choose to continue their climate-related efforts independently.The collapse of the NZBA has sparked debate within the financial sector and among environmental advocates. Some critics argue that the alliance's voluntary framework lacked enforceability and that its disbandment could lead to more decisive action from banks committed to climate goals. Others express concern that the retreat from collective climate commitments may hinder progress toward global decarbonization objectives, reported the Guardian.
