As of October 3rd, 2025, the Net Zero Banking Alliance (NZBA), a leading counterpart of worldwide financial institutions, has ceased operations. The deactivation of the NZBA follows four years of working alongside banks to help transition banks to net zero by 2050. At one point, the NZBA had greater than 140 members from over 40 countries, many of which were leading banks globally, prior to the departure of the significant number of members from the NZBA.

The impact of the departure of some banks (notably the U.S., Canada, and Europe) has adversely affected the NZBA in terms of declining membership, and fading influence caused the NZBA to shut down. The closure of the NZBA is relevant on many levels and will shape the role of the banking sector in quad climate action into the future. No longer will the NZBA represent a critical mass of ambition for climate solutions across the banking sector. Additionally the quietus of the NZBA highlights the struggles of delivering systemic change in climate commitments by the banks, under political and economic contexts that were different when global climate commitments were made.

Reasons Behind the Collapse

The disbanding of the NZBA followed increasing political pressure and legal challenges, particularly from policymakers in the United States. Opposition to climate-related banking commitments gained traction in certain political circles, creating headwinds for the alliance. These external pressures combined with internal disagreements over strategy and priorities, making continued collaboration difficult.

The restructuring of the Global Financial Alliance for Net Zero (GFANZ), the parent body of the NZBA, further weakened the alliance’s influence. The changes diluted some of the original climate ambitions that had formed the foundation of the initiative. Earlier in 2024, the Net-Zero Insurance Alliance also disbanded, a development that foreshadowed a broader retreat from joint climate action within the financial sector. These shifts point to a larger trend where coordinated global efforts are increasingly challenged by political, regulatory, and operational realities.

Reactions from Stakeholders

The closure of the NZBA drew varied and often strong reactions. Environmental activists and climate advocates criticised the decision, arguing that it represented a retreat from climate responsibility. They viewed it as a concession to political forces opposed to Environmental, Social, and Governance principles. Some critics suggested that the alliance had created the appearance of progress without delivering measurable results.

Conversely, several experts interpreted the disbandment as an opportunity for financial institutions to move from collective pledges to individual accountability. They argued that climate action requires concrete projects, clear financing strategies, and measurable outcomes rather than broad alliances. For some, the dissolution signalled the need for a shift in strategy towards direct investments in sustainable projects rather than maintaining large-scale coalitions.

The Path Forward

With the dissolution of the NZBA, the responsibility for climate action now rests with individual banks and financial institutions. The absence of a collective framework does not remove the urgency for the sector to contribute meaningfully to the global transition to a low-carbon economy. Institutions will need to develop their own strategies, backed by clear action plans, measurable results, and transparent reporting.

The coming years will be critical in determining whether the banking sector can meet climate targets without the support of a unified alliance. Success will depend on whether financial institutions translate commitments into tangible results and sustainable financing initiatives. This moment marks both a challenge and an opportunity for the sector to demonstrate leadership.

The closure of the Net-Zero Banking Alliance reflects the evolving nature of climate finance. It underscores the reality that collective frameworks face challenges in maintaining cohesion but also highlights the importance of individual accountability. What this really means is the path forward lies in committed action by each institution to deliver a sustainable future.