The Net-Zero Banking Alliance (NZBA) was founded in 2021with 43 founding signatory banks committed to bringing down all emissions related to their lending and investment portfolios to net-zero by 2050.

But Quentin Aubineaumn of BankTrack has had doubts over the results. Writing on the organisation’s website he accuses banks as dithering over action as the real world consequences of the pledges become clear.

Although the NZBA has achieved success, with 144 member banks now signed up, together controlling 41 per cent of global banking assets, and most of these banks have set some sectoral decarbonisation targets, following the first set of NZBA Guidelines for Climate Target Setting. However, the third anniversary of the NZBA also marks the effective date of application of version 2 of the Guidelines, adopted in March 2024. As BankTrack pointed out recently, these new Guidelines are far from what is needed to guarantee that NZBA member banks’ future sectoral targets will be consistent with their net-zero objective by 2050.

Indeed, following the publication of the second version of the Guidelines, three NZBA banks that are also members of the Global Alliance for Banking on Values, the GABV (Amalgamated Bank, Ecology Building Society and Triodos Bank), expressed their concerns about the low ambition level of the Guidelines, stating that “the dominant economic and scientific climate scenarios make abundantly clear the need to end new fossil fuel expansion and rapidly phase out supply in favour of clean energy sources”. Germany’s GLS Bank, also a member of the GABV, left the NZBA in January 2023 in protest at members’ continued financing of fossil fuels.

One obvious real-world impact of the NZBA pledge should be that banks bring down their finance for fossil fuels. However, while the NZBA founding banks did set their sectoral targets, their finance for fossil fuels expansion has continued at high levels. To illustrate this, Aubineaumn notes that of the world's 60 largest banks featured in the forthcoming Banking on Climate Chaos 2024 report, 42 are NZBA member banks.

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