UN-backed climate banking alliance ceases operations

The Net-Zero Banking Alliance, a UN-backed initiative seeking carbon neutral investments by banks, announced Friday its immediate shutdown — at a time of faltering climate commitments in the United States and Europe.

Launched in 2021 under the UN Environment Programme’s Finance Initiative, the NZBA aimed to get banks to slash the carbon footprint of their loans and investments, and help drive the transition to a net-zero economy by 2050.

At its peak, the group counted nearly 150 members.

But the alliance had been losing members since late last year, after Donald Trump won the US presidential election with his “drill, baby, drill” mantra promoting oil and gas production.

The NZBA had paused its activities in late August while waiting for the result of a vote by its members.

“Members of the Net-Zero Banking Alliance (NZBA) have voted to transition from a member-based alliance and to establish its guidance as a framework,” an NZBA spokesperson said in a statement.

“As a result of this decision, NZBA will cease operations immediately,” the spokesperson said.

The NZBA said banks can still use the initiative’s “Guidance for Climate Target Setting for Banks”, which focuses on decarbonisation targets.

“Individual banks worldwide can continue to use and reference these resources to help develop and deliver on their own net-zero transition plans,” it said.

‘Bitterly disappointing’

ShareAction, a London-based charity that advocates for responsible investment, lamented the end of the alliance.

“It’s bitterly disappointing to see the biggest banks in the world vote to step away from accountability around their commitments to prevent the worst effects of global heating,” said Jeanne Martin, co-Director of Corporate Engagement at ShareAction.

“Senior bankers need to be far more courageous in this decisive moment for all our futures and must use their influence to push up standards for accountability on climate if we are to stand any chance of making the clean energy transition happen,” Martin said.

Six major US banks — including JPMorgan Chase, Goldman Sachs and Bank of America — had already quit the alliance following Trump’s election, followed by Canadian and Japanese lenders.

British banking giant Barclays was one the latest to quit the alliance in August.

“With the departure of most of the global banks, the organisation no longer has the membership to support our transition,” it said at the time.

Earlier this year, NZBA softened its language on climate goals, turning “guidelines” into “guidance” and requirements into recommendations, according to internal documents seen by AFP.

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© Agence France-Presse

Article Source:
Press Release/Material by Benoît Pelegrin | AFP
Featured image credit: jcomp | Freepik