US Banks Abandon Climate Alliance Amid Republican Backlash

The Net Zero Banking Alliance (NZBA) has effectively collapsed after six major US banks withdrew from the coalition in rapid succession. The exodus began in December 2024, when Goldman Sachs and Wells Fargo left the alliance, followed by JPMorgan Chase in January 2025.

The NZBA was launched in 2021 as a voluntary framework for banks to pledge net-zero greenhouse gas emissions by 2050. Despite its collapse, remaining members - primarily European and Asian banks - still control roughly 40% of global banking assets, approximately $64 trillion.

The timing of the departures coincided with increased Republican opposition to Environmental, Social, and Governance (ESG) frameworks, which critics argue amount to collusion that restricts energy companies' access to capital. JPMorgan Chase framed its departure as a focus on 'pragmatic solutions' for low-carbon technologies and energy security.

The fragmentation of climate finance is likely to force investors to reassess their reliance on NZBA membership as a signal of institutional ESG commitment. ESG-focused funds may need to develop new frameworks for assessing bank-level climate risk, as the shorthand of 'are they in the alliance' no longer applies.