The Net Zero Banking Alliance (NZBA), a cornerstone of the financial sector’s response to climate change, has been officially terminated. The UN-backed initiative announced it was shutting down immediately after a wave of departures left it without its most influential members and with little hope of achieving its mission.
The primary cause of the alliance’s demise was the seismic shift in US politics following Donald Trump’s re-election. His administration’s “drill, baby, drill” agenda, coupled with a broader “anti-woke” crusade from conservatives, put intense pressure on American corporations to abandon their environmental, social, and governance (ESG) commitments. The NZBA became a symbol of this targeted backlash.
In a decisive move to mitigate political risk, the six behemoths of Wall Street—including Goldman Sachs and Wells Fargo—simultaneously withdrew from the alliance. This preemptive action, taken before Trump’s inauguration, was a clear attempt to appease right-wing critics but also served to fatally undermine the global coalition.
The withdrawal of the US banks triggered a crisis of confidence internationally. Without the world’s largest economy fully on board, the alliance lost its credibility. European and Japanese banks began to exit, and the final blow was struck this summer when British banking giants HSBC and Barclays followed suit.
For climate advocates, the collapse is a moment of stark division. Jeanne Martin of ShareAction lamented the move as “bitterly disappointing” and a failure of leadership. But others, like Lucie Pinson of Reclaim Finance, dismissed the NZBA as a public relations stunt that was “doomed to fail.” She insists that the only way to force banks to stop funding fossil fuel expansion is through the power of government regulation.
