Global financial institution UBS withdraws from the Net-Zero Banking Alliance, following a trend of major banks stepping away from the environmental commitment.
Major Banks Exit Net-Zero Banking Alliance Amid Political and Regulatory Shifts
A significant exodus of major banks from the Net-Zero Banking Alliance (NZBA) has been triggered by changing political and regulatory landscapes, particularly in the United States. The return of President Donald Trump to office intensified opposition against net-zero climate policies and ESG commitments, leading to legal and reputational risks for banks with NZBA commitments, causing many to withdraw.
Political pressure and skepticism towards net-zero and ESG policies, especially in the U.S., have been key factors behind the exodus. This has resulted in lawsuits and GOP blacklists targeting such initiatives, making it challenging for banks to maintain their NZBA commitments.
Between January and August 2025, large American, Canadian, British, and Swiss banks have left the NZBA, diminishing the alliance's global representation and influence. Some banks, like Barclays, have explicitly stated that NZBA "no longer has the membership to support our transition," reflecting doubts about the alliance’s effectiveness amid widespread defections.
The retreat of major banks from NZBA signals a weakening of coordinated, global banking commitments to climate mitigation. This could potentially slow progress on financing the transition to net-zero emissions. While individual banks claim to uphold sustainability targets and have ongoing sustainable finance initiatives, the absence of a collective platform like NZBA reduces transparency, shared accountability, and unified goals across the sector.
The departures raise concerns about the durability of voluntary net-zero commitments in the face of political changes and underscore the need for stronger regulatory frameworks to sustain climate ambitions in the financial sector.
Despite the wave of exits from the NZBA, the alliance continues to assist surviving banks in advancing net-zero transitions, despite criticism that its recent relaxation of regulations to non-binding targets undermines ambition.
The fragmentation of collective efforts raises concerns about the financial sector's ability to drive systemic change. Swiss financial giant UBS, a founding member of the NZBA since 2021, has withdrawn from the alliance on August 7, 2025. UBS, with $6.6 trillion in assets under management as of Q2 2025, is still helping its clients make the shift to a low-carbon economy.
The efficiency of separate tactics versus coordinated action remains a topic of debate. Critics argue that the NZBA's weaker criteria undermine its goal of addressing climate change, while others highlight the conflict between individual strategic interests and cooperative climate action.
Dr. Elizabeth Green, a leading voice in sustainability, has over two decades of experience in the field and is actively involved in several global sustainability initiatives. Triodos Bank is among the critics who argue that the NZBA's weaker criteria undermine its goal of addressing climate change.
In March 2025, UBS deferred its operational emissions target from 2025 to 2035. The NZBA may be less able to push for the legislative and regulatory changes required to hasten decarbonization due to its weakened structure and the departure of essential actors. The efficiency of separate tactics versus coordinated action remains a topic of debate.
- The exodus of major banks from the Net-Zero Banking Alliance (NZBA) has highlighted the challenge of balancing individual strategic interests against cooperative climate action.
- Dr. Elizabeth Green, an esteemed voice in sustainability, is amongst critics who question the effectiveness of NZBA's weaker criteria in addressing climate change.
- Triodos Bank, a global player in sustainability initiatives, shares the concern that the NZBA's weakened structure may hinder its ability to drive necessary legislative and regulatory changes for decarbonization.
- The efficiency of separate strategies, as demonstrated by UBS's decision to defer its operational emissions target from 2025 to 2035, is a point of contention in the discourse surrounding the NZBA's impact on the environment.
- Despite the criticisms, the NZBA continues to provide support to surviving banks in their net-zero transitions, offering green courses, events, and education in areas such as environmental-science, sustainability, and climate-change.
- Financial institutions, like UBS, with a commitment to sustainability and finance, play a vital role in the low-carbon economy transformation, even amidst the fragmentation of collective efforts in organizations like the NZBA.
- The retreat of major banks from the NZBA brings into focus the importance of environmental-reports, science-based ESG policies, and business strategies that prioritize climate-change mitigation for a sustainable future.
