In a stunningly rapid decline, the Net Zero Banking Alliance (NZBA) has gone from a peak membership of nearly 150 global banks to total collapse in under a year. The organization has been forced to shut down immediately, marking a swift and dramatic end to a major corporate climate initiative.
The beginning of the end came late last year with the re-election of Donald Trump. His victory on a pro-fossil fuel platform immediately changed the risk calculation for the alliance’s US members. The political environment turned hostile, and the alliance’s foundation began to crack.
The first major shock to the system was the coordinated withdrawal of the six largest American banks. This mass exit, which included all the major Wall Street firms, happened before Trump’s inauguration and was a fatal blow. It removed the alliance’s most powerful contingent and triggered a crisis of confidence.
The collapse accelerated throughout this year. Seeing the alliance fatally weakened, members from Europe and Japan began to head for the exits. The final phase of the collapse came this summer with the high-profile departures of British banking giants HSBC and Barclays.
This rapid journey from peak to trough highlights the inherent volatility of voluntary corporate coalitions. Without binding commitments to hold them together, they are susceptible to sudden and catastrophic failure when faced with external shocks. The NZBA’s story now serves as a stark warning about the limitations of such models for addressing long-term challenges like climate change.