Banking net zero club to change structure after member exodus
The global banking industry’s climate group will hold a vote on the future of its structure following a mass exodus of members.
The Net-Zero Banking Alliance (NZBA) will determine whether it will transform from a membership-based alliance to a “new framework initiative”.
It comes after the world’s banking giants fled the group as the financial services industry turned sour on environment, social and governance (ESG) policies.
Wall Street began its rapid departure from the club following President Donald Trump’s victory in the November 2024 election after he ran on the anti-ESG motto “drill baby drill”.
Goldman Sachs announced its exit in the month following Trump’s win. By January, JP Morgan marked the last to exit sealing a complete Wall Street exodus after Citi, Bank of America, Morgan Stanley and Wells Fargo all quit the group.
The Royal Bank of Canada, Bank of Montreal and Toronto-Dominion Bank departed at the end of January marking a total erasure of North America from NZBA.
Over in London, the City’s banking titans followed suit with Wall Street. HSBC exited in July, followed by Barclays in August, which claimed the group “no longer has the membership to support our transition”.
Trump effect spreads to UK
In a statement shared with Morning Wire earlier this month, NZBA said it “remains focused on supporting the many banks that are leading this transformation”.
They added that amid changing environmental policies the “need for bold, resolute action from the banking sector has never been greater”.
However, not all major lenders have flipped the script on ESG.
Bill Winters, the chief executive of Standard Chartered, blasted his peers for abandoning their commitments when they were no longer “fashionable”.
NZBA expects to determine its new structure at the end of September.
Its steering group proposed the new vote on the belief it was the “most appropriate model to continue supporting banks across the globe to remain resilience and accelerate the real economic transition in line with the Paris Agreement.”
Upon his return to the White House, one of Trump’s first executive orders was used to withdraw from the Paris Climate Agreement – which spans 200 countries agreeing to a series of measures to tackle climate change.