NZBA (Net-Zero Banking Alliance)

The Net-Zero Banking Alliance (NZBA) is an industry-led, UN-convened group launched in April 2021 under the umbrella of the United Nations Environment Programme Finance Initiative (UNEP FI). It forms one of the sectoral pillars of the broader Glasgow Financial Alliance for Net Zero (GFANZ), chaired by Mark Carney and Michael Bloomberg, which was unveiled ahead of COP26 in Glasgow.

Signatory banks commit to:

• Aligning operational and attributable greenhouse gas emissions from their lending and investment portfolios with pathways to net zero by 2050.
• Setting intermediate targets for 2030 (or sooner) within 18 months of joining, covering priority carbon-intensive sectors such as oil and gas, power, coal, transport, and real estate.
• Publishing annual progress reports and using science-based scenarios consistent with limiting warming to 1.5°C.

The Alliance grew rapidly after launch, at one point covering banks representing roughly 40% of global banking assets. However, NZBA has faced significant political and commercial turbulence. In the United States, Republican state attorneys general and congressional committees argued that coordinated decarbonisation commitments raised antitrust and fiduciary-duty concerns, contributing to an "anti-ESG" backlash. Several major banks announced departures in late 2024 and early 2025, including JPMorgan Chase, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs, with some Canadian and Japanese banks following.

In response, NZBA members voted in April 2025 to loosen the framework, shifting from a strict 1.5°C alignment requirement toward a more flexible "well-below 2°C" ambition consistent with the Paris Agreement, and giving banks more discretion over target-setting.

For MUN and IR researchers, NZBA is a useful case study in private climate governance, voluntary standard-setting, the limits of transnational soft law, and the interaction between climate policy, competition law, and US state-level political pressure.