The Net Zero Banking Alliance (NZBA) has proposed to move the organisation from a "membership-based alliance" to a "establishing its guidance as a new framework initiative", to support banks in their climate transitions.
The NZBA — a global, voluntary alliance of banks — has asked its members to vote on its proposed shift. The outcome of the vote will be made public at the end of September, and it has in the meantime "paused its ongoing activities", the organisation said today.
"The NZBA steering group will be using the coming weeks to further build out the details of what the proposed transition to a framework would look like in practice", the organisation told Argus today. It will share details "in due course", it added.
The proposal is "the most appropriate model to continue supporting banks across the globe to remain resilient and accelerate the real economy transition in line with the Paris Agreement", the NZBA said.
The organisation in April released guidance for climate target setting, for banks to use. It included increased flexibility around climate targets, allowing its members to set targets aligned with the upper temperature limit sought by the Paris climate agreement. The Paris agreement seeks to curb the global rise in temperature to "well below" 2°C above pre-industrial levels, while pursuing efforts to limit warming to 1.5°C.
NZBA signatories originally committed to a net zero by 2050 goal, as well as interim targets and transparent reporting, in line with UN criteria. The NZBA "encourages the banking sector to remain steadfast in implementing their net-zero commitments", it said today.
Several large US banks exited the NZBA early this year, days ahead of US president Donald Trump's return to the White House.
UK banks HSBC and Barclays left the alliance in July and earlier this month, respectively.
"With the departure of most of the global banks, the organisation no longer has the membership to support our transition", Barclays said on 1 August.
"First pressure from some of its biggest members pushed NZBA to water down its guidelines, now the exodus of those same members means it is considering scrapping its membership altogether", director of financial sector standards at non-profit ShareAction Louise Marfany told Argus.
The move is "a clear sign we need smarter regulation to ensure banks stay committed to the transition", Marfany added.
