Swiss lender UBS has left the Net-Zero Banking Alliance as part of its annual reviews of sustainability and climate-related memberships.
Other British banks have departed, including Barclays and HSBC. This raises questions about the future of the alliance, an initiative established in 2021 to support banks with climate goals such as funding environmentally friendly activities and setting emission reduction targets. Although the group offered valuable frameworks for target-setting, UBS chose to leave as it had advanced its own capabilities enough to be independent in its sustainability goals.
Changes in banks’ sustainability strategies
The NZBA is a global member-led initiative supporting banks to lead on climate mitigation in line with the goals of the Paris Agreement. Members look to it for insights on how to unlock opportunities and demonstrate progress as they develop and execute their net-zero strategies for financing the transition.
Barclays quit the group due to other banks departing, leaving the NZBA less fit to support the bank’s green transition. Global banks, such as JPMorgan, Citi, Morgan Stanley, Macquarie and Bank of Montreal, have all exited the alliance this year as the US increases its oversight of financial institutions that support pro-climate policies.
UBS mentioned that the alliance played a valuable role in supporting institutions in establishing initial target-setting frameworks in its early days. A NZBA spokesperson claims that the alliance’s strength lies in its commitment to support its member banks to lead the net-zero transition. This long-term operation requires consistency and leadership, according to the group, even when faced with setbacks.
Recently, NZBA got rid of restrictive membership rules in an attempt to keep some of its members. This move is a reflection of the slow-paced change in the real economy, enabling the group to appeal to emerging market leaders. In July, UBS announced some leadership changes, which can impact the sustainability strategy and philanthropy operations.
