The collapse of the Net Zero Banking Alliance (NZBA) is forcing many to ask: was the industry’s commitment to climate action just a fair-weather friendship? The global banking group has dissolved after the first sign of a major political storm sent its most prominent members running for cover.
During the “fair weather” period of growing ESG popularity and supportive political environments, the NZBA flourished, attracting nearly 150 members. Banks were eager to join and signal their commitment to a sustainable future, enjoying the positive publicity that came with it.
But the weather changed dramatically with the re-election of Donald Trump. His administration ushered in a period of stormy “anti-woke” politics, especially in the US. Faced with these adverse conditions, the alliance’s most powerful friends proved to be unreliable.
The six largest US banks, including JPMorgan Chase and Goldman Sachs, were the first to abandon the friendship, deciding it was too risky to be seen with the NZBA in a hostile climate. This act of abandonment left the alliance exposed and vulnerable.
Their departure created a chill that spread internationally. Other fair-weather friends, like HSBC and Barclays, also decided to end the relationship. The alliance, it turned out, was a friend to many banks only when it was convenient. Now that it is gone, critics argue that the climate needs a more reliable partner: the unwavering and legally binding power of government regulation.