The Net-Zero Banking Alliance has paused all ongoing activities as its members vote on whether to transition from a membership-based alliance to a framework-based initiative, the UN-convened coalition said on Aug. 27.
The Steering Group stated that the proposed shift aims to provide a stronger structure to help banks remain resilient, accelerate the real economy’s transition in line with the Paris Agreement, and deepen engagement with clients.
The results of the vote are expected to be announced at the end of September.
Membership Growth and Climate Commitments
According to its 2024 Progress Report, NZBA membership has surged from 43 banks at launch in April 2021 to 144 banks across 44 countries as of mid-2024.
European banks account for the largest share, but Asia-Pacific lenders have grown to represent almost a quarter of members’ combined assets.
The report stated that 97 percent of banks, which were due to set climate targets by May 2024, had already done so, with most focusing on high-emitting sectors such as power generation, oil and gas, and real estate.
Four-fifths of eligible banks had established targets across a substantial majority of carbon-intensive sectors, though many institutions in emerging markets have struggled with limited data and unclear decarbonization pathways.
Transition Planning Gains Momentum
Nearly two-thirds of banks required to publish transition plans had already completed them by mid-2024, while another quarter plan to do so before year-end.
Many lenders are adopting client engagement strategies, which the alliance said are crucial for aligning portfolios with net-zero goals.
Banks are prioritizing target setting in sectors with clearer decarbonization pathways, such as energy and transport, while progress in agriculture and heavy industry lags behind.
Call for Policy Support
While banks are moving ahead with voluntary commitments, NZBA urged governments to accelerate policy action to make net-zero financing more viable. It called for clearer national transition pathways, improved emissions data, and stronger incentives for green technologies.
“The NZBA has demonstrated that banks are willing to act, but their commitments cannot substitute for climate-related policies in the real economy,” the report said.
