Barclays Leaves United Nations-Endorsed Zero-Carbon Banking Group After HSBC's Exit
In recent developments, several global banks have decided to exit the Net-Zero Banking Alliance (NZBA), citing political pressure and concerns about the alliance's effectiveness. This trend has been particularly noticeable among North American banks, with the departure of major players like HSBC (UK), Macquarie (Australia), Sumitomo Mitsui (Japan), and Barclays (UK) following suit [1][3][2].
The NZBA, a coalition of financial institutions committed to aligning their lending and investment portfolios with the goals of the Paris Agreement, has faced criticism from certain political groups in the U.S. over its Environmental, Social, and Governance (ESG) focus. These groups have led anti-ESG campaigns, raising concerns about legal and regulatory risks associated with participation in climate alliances [1].
Despite their exit from the NZBA, banks like HSBC and Barclays have reaffirmed their commitment to achieving net-zero emissions by 2050 and supporting their customers' transition to low-carbon operations [1][4][2]. They argue that their approach to sustainable finance will be more pragmatic and tailored to diverse sectoral and regional decarbonization pathways.
However, the exodus of key global banks from the NZBA could have significant implications for sustainable finance and climate action. For instance, the group may lose critical mass and influence, undermining its ability to coordinate capital flows towards decarbonization at scale [2]. This could potentially slow or fragment standardized target-setting and disclosure frameworks for financed emissions, given the reduced collective commitment of major banks [4].
Environmental NGOs, such as ShareAction, have expressed concerns that these departures are setbacks in global efforts to combat climate change, particularly at a time when urgent action is needed [2][5]. However, many banks maintain that their climate ambitions remain intact, suggesting a shift from collective alliance work towards independent or alternative approaches to sustainable finance [1][4].
The series of exits from the NZBA has cast doubt on its future and the feasibility of coalition-based approaches to mobilizing finance for climate action. If the NZBA weakens, climate finance in sensitive areas like Southeast Asia may be disrupted [1]. In the U.S., banks have reportedly faced backlash from Republican lawmakers who criticize ESG-aligned financing as "woke capitalism" [1].
Barclays, one of the banks that exited the NZBA, has faced criticism for its large fossil fuel financing. Despite investing over £508 million in climate technology since 2020 and producing £500 million from green initiatives in 2024, Barclays was named Europe's largest fossil fuel funder by Rainforest Action Network and Reclaim Finance [1]. Critics find Barclays' actions contradictory given its large fossil fuel financing.
Despite these challenges, Barclays has pledged to reach net-zero emissions by 2050 and has promised $1 trillion in sustainable financing by 2030. The actions of major financial players, including Barclays, will remain under scrutiny in global efforts to fund climate resilience.
References: [1] Reuters. (2025, August 2). Barclays exits Net-Zero Banking Alliance, critics question commitment to climate goals. Reuters. https://www.reuters.com/business/finance/barclays-exits-net-zero-banking-alliance-critics-question-commitment-climate-goals-2025-08-02/
[2] Climate Home News. (2025, July 12). Major banks exit Net-Zero Banking Alliance, raising concerns over climate action. Climate Home News. https://www.climatechangenews.com/2025/07/12/major-banks-exit-net-zero-banking-alliance-raising-concerns-over-climate-action/
[3] The Financial Times. (2025, January 15). U.S. and Canadian banks exit Net-Zero Banking Alliance. The Financial Times. https://www.ft.com/content/7927e3f3-b6b9-4a9c-b81a-a889a97b71a9
[4] The Guardian. (2025, July 13). Net-Zero Banking Alliance faces questions as banks exit. The Guardian. https://www.theguardian.com/business/2025/jul/13/net-zero-banking-alliance-faces-questions-as-banks-exit
[5] ShareAction. (2025, July 12). Major banks exiting Net-Zero Banking Alliance is a setback for global efforts to combat climate change. ShareAction. https://www.shareaction.org/news/major-banks-exiting-net-zero-banking-alliance-is-a-setback-for-global-efforts-to-combat-climate-change/
- The NZBA, initially laudable due to its commitment to ESG and green policies, has faced challenges as several global banks, including HSBC and Barclays, have decided to exit, citing political pressures and concerns about its effectiveness.
- banks like HSBC and Barclays, despite their decision to leave the NZBA, continue to pledge their support for achieving net-zero emissions by 2050 and are reassessing their approach to sustainable finance to be more pragmatic and tailored towards diverse sectoral and regional decarbonization pathways.
- The exodus of key global banks from the NZBA has cast doubt on the coalition's ability to coordinate capital flows towards decarbonization at scale, and could potentially slow or fragment standardized target-setting and disclosure frameworks for financed emissions.
- Environmental NGOs, such as ShareAction, have expressed concerns about the impact of these banking departures on global efforts to combat climate change and sustainability, particularly in sensitive areas like Southeast Asia.
- Barclays, one of the banks that departed the NZBA, faces criticism for its large fossil fuel financing despite its investments in climate technology and initiatives to reach net-zero emissions by 2050 and to provide $1 trillion in sustainable financing by 2030.
