The Net-Zero Banking Alliance ( NZBA ) has renewed its mandate to emphasize support for banks in financing real-economy decarbonization – a decision that follows a year-long strategic review and a membership vote, during which 90% of participating banks approved the proposed changes.

The updated framework aims to provide practical tools for banks to implement climate strategies, focusing on sectoral engagement and client relationships to unlock investment opportunities in green growth.

The NSBA’s renewed focus, it says, aims to balance the need for ambitious climate action with the practicalities faced by banks in different regulatory and economic environments.

However, this renewal comes amid significant departures from the alliance. Since December 2024, a number of major banks have exited the NZBA, including Goldman Sachs, Wells Fargo, Morgan Stanley, JPMorgan Chase, Bank of America and Citigroup.

These withdrawals have been largely attributed to political pressures in the US, where banks have faced political scrutiny over their environmental, social and governance commitments.

However, a number of Asian-based lenders have also left the alliance, including some of Japan’s major banking groups, including SMFG, Nomura, MUFG, Norinchukin Bank and Mizuho Financial Group. Their departures also reflected growing industry concerns about aligning global climate commitments with regional regulatory and economic realities.

Despite leaving the NZBA, many of these institutions assert their continued dedication to net-zero goals. For instance, Citigroup stated it would focus on mobilizing capital to emerging markets for the low-carbon transition, while Bank of America emphasized ongoing client support in reducing carbon emissions.

The NZBA’s updated framework reflects, it notes, an acknowledgment of varying net-zero pathways aligned with the Paris agreement's goals, offering flexibility for banks operating across diverse markets and sectors.

“We are halfway through the critical decade for action on climate,” says Shargiil Bashir, NZBA’s chair and First Abu Dhabi Bank’s chief sustainability officer and executive vice-president, “and we need all sectors, including banking and finance, to commit to moving the needle on emissions reductions.

“As the largest global initiative specifically focused on supporting climate mitigation action by banks, the NZBA is uniquely positioned to provide practical support to banks navigating the net-zero transition.”