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A global climate alliance of top banks is at risk of losing key European members after lenders refused to commit to remaining in the group, further weakening its position after an exodus of Wall Street firms.
Barclays, which joined in 2021, declined to confirm its membership plans in a conversation with the Net-Zero Banking Alliance’s leadership in recent days, a banker familiar with the matter said.
The bank had discussed dates for its possible departure and was considering investors’ responses to HSBC’s exit last week, another person familiar with the matter said. A person close to Barclays said a decision on membership had not been made, and that the bank was still a member.
UBS said it would “carefully consider” how the group’s new, less stringent, climate rules aligned with its strategy, a message it has repeated since January, although it remains a member of the alliance for now. Santander said its net zero commitments were “unchanged”, but declined to comment on its membership plans.
The battle to retain members reflects a shift in attitude towards environmental, social and governance initiatives, and climate activism since Donald Trump returned to the White House. It also follows attacks by Republican politicians on the alliance and against the push to reduce global warming. JPMorgan Chase and Bank of America were among the US and Canadian groups that left after Trump’s election.
The NZBA was set up by banks in 2021 with the backing of Mark Carney, the Canadian prime minister who was then governor of the Bank of England. Carney pledged at the time that $4 in every $10 under management globally would be deployed to limit global warming.
But the alliance’s membership has been eroded with its combined assets falling from $74tn at the start of December to $44tn on Tuesday. It has struggled to retain some of its big members despite its softening of climate target rules that members must meet.
Shargiil Bashir, chief sustainability officer at First Abu Dhabi Bank (FAB) and chair of the alliance’s steering group, has spoken to European banks to understand their concerns, according to the person familiar with the discussions. FAB did not respond to a request for comment.
The alliance’s members voted in April to ditch a pledge to align their assets with the 2015 Paris Agreement to limit global warming to 1.5C above pre-industrial levels, in favour of a less stretching target to limit it to 2C.
The group no longer requires members to aim to hit net zero by 2050, following threats by European banks to withdraw.
HSBC’s departure may signal a wholesale break with the idea — once widely accepted by the financial industry — that banks should help achieve the Paris goals laid out by governments, the banker familiar with recent conversations with the NZBA said. “They took this opportunity to walk away . . . just as the alliance had given them more flexibility,” he said, referring to HSBC’s exit.
A person close to the alliance’s leadership said the group had “missed a trick” by softening rules in an unsuccessful bid to keep European lenders on board, rather than staying the course on its original ambitions.
Jeanne Martin of the investor campaign group ShareAction said HSBC’s move “sends a counter-productive message to governments and companies”.
HSBC said it remained “resolutely focused” on helping customers finance their “transition objectives” and on its 2050 net zero goal. The bank is preparing an updated climate strategy to present to investors.
Some banks remain strong backers of the group. Standard Chartered said it was a “supportive member”. Bill Winters, chief executive, said last month that leaders who have stopped speaking up about green issues should feel “ashamed”. Nomura quit the group earlier this year but other Asian and Middle Eastern banks have continued to back it.
The NZBA said it could not comment on banks’ “potential decisions” but that “many” had recently reaffirmed their commitment to the group. While 23 banks have left since the group was founded, more than 100 have joined in this time, including more than 80 European banks.
Additional reporting by Ortenca Aliaj and Simon Foy in London