Net Zero Banking Alliance reacts to membership losses

Reports suggest that the Net Zero Banking Alliance (NZBA) – a group which contains Barclays and UBS Group - is preparing to canvas its members with a vote on dropping the 1.5C warming target[i]. The NZBA is bank-led and UN-convened, representing major global banks committed to aligning their lending, investment, and capital markets activities with net-zero greenhouse gas emissions by 2050, with interim targets for 2030. The Alliance, which was founded in 2021, has more than 130 members from 44 countries, collectively managing $50 trillion in assets[ii].

Now there are suggestions that the Alliance could make requirements for member businesses to fully align with the Paris Agreement target of 1.5C more lenient, instead potentially allowing them to align with the 2C trajectory.

The NZBA has said that a strategic review of the rules has been underway for almost a year, as it responds to shifting economic and political dynamics. In a written response seen by Bloomberg, NZBA Chair Shargiil Bashir said that the alliance is tackling the question of “whether and how to respond to variations in the ambition of climate-related policy and regulation across countries and regions.” He added that consideration will be given to “regional differences in decarbonization rates” and “the widening gap between 1.5C pathways and the real economy in many sectors and markets”[iii]

A formal proposal has been presented to NZBA members, with voting scheduled from the middle of this month into early April, results will then follow later next month. The changes follow a string of high-profile membership loses, including all six of the largest US banks – JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, and Goldman Sachs.

‘Climate climbdown’ continues

Earlier this year BlackRock, the world’s largest asset manager, announced its departure from the Net Zero Asset Managers initiative (NZAM), as a ‘climate climbdown’ spread amongst US firms prior to Donald Trump’s inauguration as US President in mid-January. NZAM, which launched in December 2020, asks signatories within the asset management industry to support the goal of net zero emissions by 2050, along with a commitment to support investing aligned with net zero emissions by 2050 or sooner. The initiative’s website states that signatories include more than 325 asset managers, representing $57.5 trillion in assets[iv]. Following BlackRock’s departure, NZAM suspended key reporting and tracking activities.

References

[i] Bankers Climate Alliance Prepares Vote on Ditching 1.5C Goal

[ii] Members – United Nations Environment – Finance Initiative

[iii] Bankers Climate Alliance Prepares Vote on Ditching 1.5C Goal

[iv] The Net Zero Asset Managers initiative – An international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions

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