On Friday, the Net Zero Banking Alliance (NZBA) said that it was ceasing operations immediately, following a vote by remaining members “to transition from a member-based alliance and to establish its guidance as a framework.”
“The result of the vote has provided a mandate to explore how best to carry this work forward,” an NZBA spokesperson said.
The decision took place about four months after NZBA members voted to relax requirements that had them aligning portfolios with a 1.5°C-global warming target and setting five-year goals for reducing financed emissions.
The alliance, which counted over 140 banks as members in 2024 with more than US$70 trillion in assets under management, has been on shaky ground since the re-election of United States president Donald Trump, who recently called climate change a “con job”.
US banks, led by Goldman Sachs, began pulling out of the alliance late 2024, after which several European, Canadian and Japanese banks followed suit.
But Southeast Asian banks have said that they are committed to climate action despite the end of the alliance.
Banking group CIMB, which was part of NZBA’s steering group, has said that climate action and accelerating the transition to a low-carbon economy remains a strategic priority for the group.
“NZBA has made significant contributions by establishing the market standard that outlines what robust net-zero targets for the banking industry entail,” Luanne Sieh, group chief sustainability officer of CIMB Group, told Eco-Business.
“We will continue to do our part in updating the valuable resources developed by the NZBA, working with stakeholders on credible and impactful strategies and initiatives that advance the net zero transition of the real economy,” she said.
Meanwhile, Eric Lim, group chief sustainability officer of Singapore-headquartered banking group UOB, said the bank continues to believe in the need to decarbonise the region while ensuring a just transition.
“When setting our net zero targets, we considered structural differences across the region, extracting regional pathways for targets that represent fair contributions of our key markets,” he told Eco-Business. “We have stayed pragmatic, even as we are guided by the science in setting our net zero targets and adopting internationally-recognised climate models.”
Other banks across Southeast Asia have also reaffirmed their climate commitments in recent months. Singapore’s DBS reiterated its commitment to its emissions targets in March this year, while Maybank’s chief sustainability officer Shahril Jimin said in April that the bank would not scale back on strategic climate-related commitments.
NBZA was one of eight independent initiatives established under the Glasgow Financial Alliance for Net Zero (GFANZ) in 2021, a coalition of leading financial institutions around the world that are committed to accelerating emissions reductions.
It is not the first of the financial sector’s net zero alliances to have folded – the Net Zero Insurance Alliance was discontinued in April 2024 after nine major insurers exited. Earlier this year, the Net Zero Asset Managers Initiative suspended activities and launched an internal review, citing “recent developments in the US and different regulatory and client expectations” in other operations.
Some observers said that the end of such initiatives was inevitable. Lucie Pinson, founder and executive director of non-governmental organisation Reclaim Finance said that most decarbonisation targets required of NZBA members were outdated, and that institutions which are actually committed to climate action will continue to address financed emissions independent of the NZBA.
“But make no mistake: the massive reallocation of financial flows towards sustainable solutions will not happen without strong public intervention,” Pinson said, pointing out that banks are still devoting twice as much capital to fossil fuels as they are to clean energy.
“The priority remains to stop fossil fuel expansion and amass support for sustainable alternatives.”
