By Rebecca Speare-Cole

Copyright independent

The banking sector’s global alliance for setting climate targets has ceased operations after an exodus of its members over the last year.

Assembled in 2021 by the UN Environment Programme’s finance initiative but led by banks, the Net Zero Banking Alliance (NZBA) committed members to align their lending, investment and capital markets activities with cutting planet-warming greenhouse gas emissions to net zero by 2050.

But several major banks, including British lenders HSBC and Barclays, left the group within the last year.

Remaining NZBA members have now voted to stop being a member-based organisation, the alliance announced on Friday.

The resources developed over the last few years will remain available to banks looking to make commitments to help tackle climate change.

A spokesperson for the alliance said: ““Members of the Net-Zero Banking Alliance (NZBA) have voted to transition from a member-based alliance and to establish its guidance as a framework.

“The Guidance for Climate Target Setting for Banks and supporting implementation resources are the most widely used global banking framework focused specifically on setting decarbonisation targets and will remain publicly available.

“Individual banks worldwide can continue to use and reference these resources to help develop and deliver on their own net-zero transition plans.

“As a result of this decision, NZBA will cease operations immediately.”

Since Donald Trump’s election victory in the US last November, several of the country’s biggest lenders left the alliance, including JPMorgan, Goldman Sachs and Bank of America.

It came as part of a wider trend that saw corporate America returning to more conservative political stances, including weakening their climate commitments, cutting sustainability-focused investments and pulling out of climate groups.

This summer, HSBC and Barclays in the UK followed suit, announcing they were also pulling out of the member organisation after the exit of US lenders.

Political divisions over net zero have been deepening in the UK, as the Conservative and Reform parties push back on the Government’s clean power drive.

Campaigners have condemned the exodus of major banks from the group, saying it undermines international efforts to co-ordinate climate action.

Jeanne Martin, co-director of corporate engagement at ShareAction, which advocates for responsible investment, said: “It’s bitterly disappointing to see the biggest banks in the world vote to step away from accountability around their commitments to prevent the worst effects of global heating.

“The climate crisis is driving up food prices, multiplying health risks with extreme heat, especially for the most vulnerable in society, and causing destruction to homes and lives through floods and wildfires.

“Despite some governments and corporates dialling down on their efforts to tackle the climate crisis, public support for climate action remains high and many investors are all too conscious of the massive risks to the economy of a worsening climate.

“Senior bankers need to be far more courageous in this decisive moment for all our futures and must use their influence to push up standards for accountability on climate if we are to stand any chance of making the clean energy transition happen.”