The fact the Net-Zero Banking Alliance is smaller now than it was last year could be deemed a failure for the organisation, and by many advocates of action to mitigate climate change, as a shameful reversal
of commitment not just by the top institutions in the banking industry, but of society itself. But what if the exit from the volunteer body – primarily occurring in late 2024 and mid-2025 - of every large bank member in the US and Canada, and several others
outside North America – was instead viewed through the lenses of many on the front lines of the carbon reduction fight as more of a disappointment, perhaps, than a catastrophe?
On 27 August 2025, NZBA announced that they had “initiated a member vote to decide on a proposed transition from a membership-based alliance to establishing its guidance as a new framework initiative.” With more news to come after that vote is completed
in late September, the issue remains: what is the effect of decreased membership in (or elimination of) the organisation?
Finextra posed questions on this topic to a collection of corporate sustainability industry observers and practitioners – as well as sustainability program leaders at global financial institutions in both the departing and remaining camps within NZBA’s ranks.
We also reached out to executives at smaller banks - on both sides of the Atlantic – to get their thoughts on the matter as institutions built from the ground up to espouse carbon-neutral targets and more earth-friendly policies throughout their operations.
Our purpose is to objectively and dispassionately review the outcomes of some of these climate transition and organisational transformation offerings by financial institutions in the marketplace – especially in light of potential changes to NZBA and developments
within the sustainable finance movement now and in the future.
It's an especially relevant time for our Finextra team to revisit these issues, since we’ll be co-presenting, with ResponsibleRisk, our annual
SustainableFinance.live conference and hackathon in London, around two months from now in early November. Richard Peers, CEO of ResponsibleRisk, attributed the recent defections from NZBA to a sort of ‘levelling
out’ of industry enthusiasm following initial strong momentum for financial institutions supporting sustainable practices.
Sustainability is now past the ‘hype cycle’ - yet adoption’s still progressing within financial services
Peers points to the ‘adoption curve’ first described by
Everett Rogers in his work with farmers and evaluating their comfortability with new methods and technology, and then adapted further by
Geoffrey Moore in his book
Crossing the Chasm. “Like the technology life cycle, the adoption curve, (in this case, large bank support of sustainable practices) goes up, and you get the hype cycle. Then you get despondency, and then you get the plateau of productivity.”
Peers isn’t really shocked by what has occurred within the industry and the corporate sustainability field. In addition to economic factors, changing politics have contributed to the shifts in priorities, he admits. “I was saying maybe a year ago that we were
heading into the trough of despondency, but actually what follows is the plateau of productivity. Once we have sorted the wheat from the chaff and we are left with the real players, with purpose, and with potential for profit.”
We heard similar views from other climate and sustainable business policy experts, active financial services industry adherents, and past and present NZBA members - at most disappointment, generally a lack of surprise, and at best, a few sighs of resignation.
But the common theme of all their input was what they said continues to matter as much in 2025 and beyond as it did when the NZBA started more than four years ago, and when the climate change awareness movement began in earnest around four decades ago. That
is continuing and shared resolve among many individuals, companies (including financial institutions and investment firms), non-governmental organisations, and governments to keep supporting the work that the NZBA and related industry bodies were formed to
do. Our sources shared many examples of how that work is being done despite any one organisation’s shrinkage in membership or prominence - even in the face of withering geopolitical and macro and microeconomic scrutiny of sustainability’s principal aims.
Focus on returns for sustainability not a surprise, welcomed by many experts and FI practitioners
Andrew Winston, megatrends expert, best-selling author, and consultant, has been on the front lines of the corporate sustainability movement for more than two decades. In 2022 he published his fourth book,
Net
Positive, with former Unilever CEO and sustainability advocate Paul Polman, to share reasons and examples why companies should focus their efforts on ‘doing well by doing good’ in the marketplace.
In our conversation, alluding to the rapid pace of change and geopolitical and economic pressures facing the climate mitigation movement (another example of the latter being Unilever’s pivot from some of its key principles, which some in the sustainability
field have decried, and others
defended), Winston was both reflective and pragmatic about the recent major-bank exits from the NZBA. He pointed out that he wasn’t really “counting” on the banks to lead the charge
to “cleaner” business models, but that it was inevitable they would embrace them eventually: “I'm disappointed that they pulled out, but for the ones who pulled out, it may not change that much what they invest in. That's the bottom line.”
Winston contemporary and fellow author, speaker, and management adviser Daniel Aronson echoed some of Winston’s insights, and as his consulting practice,
Valutus and recent book, The Value of Values posit, says sustainability measures need to prove themselves, i.e.,
demonstrate measurable returns on investment, or ROI, just like any other projects or investments.
Of the retreat by some prominent banks from the NZBA, he offers, “I think that there are a lot of different forces at play. And it's more difficult to be in an organisation like [the NZBA] when it has reputational or government relations costs, but also
not being in it has costs too.”
Sometimes, Aronson asserts, politics or economics overwhelm efforts to do good, as in the case of investor pressures for higher profits, delivered now rather than later. “You've got this situation where people are discovering that you have an investor problem,
which is that investors like return, and the fossil fuel industry has been returning an amount more than people thought, partly because the [renewable energy] transition isn't happening as quickly as predicted. There's more demand, partly because of changes
at government levels and so on, and to be out of a place that's generating good returns is a bit more difficult,” Aronson explains.
Aronson’s observations on the NZBA membership situation and the apparent “cooling” of big bank support for climate mitigation and other environmental causes shouldn’t be seen as a repudiation of the importance of sustainable business practices (which he
continues to support). The problems of climate change aren’t going away, he says, and the evidence is clear, even if not right now, to many. Especially in the US, even as the country may just lead the world in its degree of split on the issues and opinions
involved.
Corporate enthusiasm wanes, but weather woes continue to plague operations, increase risk
“The story that I have to believe will be the most intuitively obvious and compelling, because it's so clearly true, is that we saw [the climate crisis] coming for decades, and if you don't prepare for it, if you don't try to reduce its severity and prepare
for when it happens, then when it does happen, that's very bad. And that's coming to the US too,” says Aronson.
Citing mounting insurance concerns and costs for homeowners and businesses in Florida (a very conservative-voting state) as one example, the long-time sustainable business advisor to many of the globe’s largest firms believes that despite what politicians
may claim or threaten, or some business leaders may believe, those same individuals and enterprises (including banks) will soon be forced to tackle climate change impacts – like curtailed supply chains, or lost access to power or water resources, or lack of
insurance coverage available for homes and business centers. The potential destruction from climate events are just a few of a growing number of delayed or denied impacts which Aronson sees as part of a “bubble” that will eventually burst right through the
business and consumer world.
“At some point people will start to realise, to the extent that things get hotter, wetter, storms get more intense, eventually they may say, wait a minute, this is actually not what I thought I was buying. It's always a little bit difficult to know how those
things turn out in terms of politics, because you have people pointing fingers in different directions to try to save their own reputations and whatever.”
Alison Taylor, NYU Stern School of Business professor and a leading voice for corporate sustainability and social awareness, recently published
Higher
Ground. Her book argues for businesses to embrace ethics honestly and transparently, for CEOs to “cut through the noise to set robust environmental and social priorities,” yet to also carefully consider how they voice and act on these “contentious
social and political issues” while building healthy organisations and company cultures.
With society as divided as it is right now, Taylor says, what’s occurring with the fade of some large banks from the front lines, i.e., ‘leadership’ as defined by membership in the NZBA, is not surprising to her. Without denying the legitimacy of their
initial aims, she also believes sustainability and resilience work continues behind the scenes, despite appearances to the contrary.
“I think I would query the effectiveness of these headline coalitions anyway. I don't think it's true that climate change focus is going away. I think what's true is the ‘yodeling’ about your net-zero goals and your ambitions and all the wonderful things
you're doing is no longer fashionable, and it's, in fact, highly risky.”
Taylor’s view is that the topic of sustainability is “pivoting,” from being completely consumer-facing, “a PR play” in her words, “to being something that's more about real risk and resilience.” She concurs with both Aronson and Winston that banks and companies
clearly recognise these risks of climate and other environmental calamities among their own institutional operations and their customer base, and they’ll increasingly and inevitably need to consider these risks when making decisions on what and which companies
and industries they choose to bank as customers. It may not happen in today’s politically-charged environment, and it won’t be just a few companies forced to take action, but the climate-induced and other pressures coming around the bend over the next few
years will tie the banks’ own resilience to the healthy operations of their customers.
New pressures from insurance side increasing calls for supply chain climate awareness and resilience
“I think we kind of exaggerated what a single company can do,” Taylor observes, “by making commitments and showing will. The idea that because there's a political backlash or election [climate worries] will go away, just isn't true. Because, even if some
people in this country don't believe it, the physical reality still exists. We’ve still got wildfires and floods and the insurance markets collapsing, and we're starting to see the evidence of this in real time, and businesses are obviously exposed to these
issues in different ways.”
It's true that amid mounting environmental disasters, organisations both in and outside the financial services industry continue to focus significant staff involvement and product development efforts on achieving lower carbon emissions levels, encouraging
the world’s consumers and commercial enterprises and operations (including bank customers) to transition to more renewable energy sources, and creating long-term, more environmentally-aware and cyclical business models to help shape a more resilient future
for humanity and the biosphere.
It's also a fact that all major US and Canadian financial institutions that had once pledged their commitments to achieve net zero targets at or following the launch of NZBA in April 2021 did walk away from the organisation. But 120 institutions remain,
including six in the US and Puerto Rico and two in Canada, plus many throughout Europe, Asia, and on other continents, and for those still in the group, on the front lines of the climate change fight, the commitment continues.
Some global banks stay the course of climate commitments, most clients approve
One of the most prominent remaining members of the NZBA is Standard Chartered, the UK-based global bank with significant presence in Asia, Africa, and the Middle East. We last reported on
Standard Chartered’s sustainable banking activities about ten months ago, and as of publication the bank has increased its sustainable banking product offering to include one of the largest and most diverse assortments of accounts
and services in the sustainable arena, when compared to its global peers.
SC, which has strongly focused on affluent clientele as part of its core group objectives, has found especially keen interest (87%)
in sustainable principles and investments among that sector of its customer base, according to a recent survey. The bank has progressed on its voluntary
commitments to reduce carbon emissions in its operations, to support renewable energy initiatives and customers, and to assist its clients in transitioning toward investments and relationships in more environmentally-friendly, future-resilient industries
and operations.
Jaclyn Dove, managing director, global head sustainable finance strategic initiatives, says, amid the evolving landscape of industry affiliations, it is prudent for Standard Chartered to “stay the course” with its commitment to climate-related initiatives.
“We recognise the acute impact of climate change – both physical and transition risks – on the communities we serve, and it’s essential that we continue to support our clients in these areas. Our efforts are focused on developing innovative products and collaborating
with clients to ensure they have access to the necessary financial instruments and capex required to facilitate their business transitions.”
HSBC had been a stalwart among the NZBA ranks, until it left the organisation this July. We reached out to HSBC’s sustainability team for a comment on why: “We recognise the role the Net-Zero Banking Alliance has played in developing guiding frameworks to
help banks establish their initial target-setting approach. With this foundation in place, we have decided to withdraw from the NZBA as we work towards updating and implementing our own Net Zero Transition Plan. We remain resolutely focused on supporting our
customers to finance their transition objectives and on making progress towards our net zero by 2050 ambition.”
Banks that place sustainability as a core mission are thriving
To get more perspectives on the NZBA story, we contacted
Triodos Bank, a Netherlands-headquartered institution with more than 91,000 customers in the UK alone, and operations in several major European capitals, and
Climate First Bank, based in St. Petersburg, Florida. Both have been members of the Net Zero Banking Alliance, as well as another organisation, the
Global Alliance for Banking on Values (GABV). Even though Triodos exited NZBA earlier this year, as explained in this
commentary, it was in recognition of a vote by the majority of the group’s members that “lowered the climate ambition of the alliance and set less strict requirements.”
Triodos is known as a committed leader in the global sustainable banking movement. Interestingly, both it and Climate First Bank, part of a select group of other independent financial institutions placing sustainability at the core of their mission statements
and ongoing operations, are also
B-Corporations. This designation requires them to follow stringent guidelines for high social and environmental performance and transparency and to legally commit “to be accountable to all stakeholders, not just shareholders“ in their corporate governance.
Executives at both banks are enthusiastic at achieving strong success (including financial profitability) in their sustainable banking activities. Triodos reported €17 million in net profit on deposits of €14.8 billion in its half-year 2025
results.
Climate First Bank, headquartered in Florida but now expanding its offerings to most other US states, is also growing quickly, now just under $1.3 billion in assets. In fact, as CEO Lex Ford explained in late August, “We've raised $125 million in capital.
Last month, we hit every financial metric you would hope for as a bank: return on assets, return on equity, efficiency, all of those were great numbers for the month and trending really well for the year. So, we're doing great. We have finally hit that tipping
point where our growth doesn't severely impact our earnings, and that's a fun place to be.”
NZBA as a concept may fade, but sustainable focus continues at banking players, large and small
Whatever the ultimate outcome of the Net-Zero Banking Alliance, which should become clear with results of the organisation’s membership vote in the next few weeks, the consensus among the sustainability industry observers and banking practitioners we interviewed
is that ‘the work goes on’ regardless.
Aronson sees the sustainability movement as an important race, not dissimilar to the present one surrounding generative AI’s growing usage and applications and the new technology’s impact on every industry, everywhere. Climate change is no different in its
relevance, and certainly not in its potential to dramatically affect businesses – and people – anywhere on the planet.
Despite the perceived loss of momentum occasioned by large bank and others exiting industry climate alliances, Aronson says we’ve seen such challenges before, and taken action to solve them, as in the days of the “space race” in the 1950’s and ‘60s. “We're
behind (in climate mitigation action). Let's go catch up in the same way that when the Soviets were heading the space race, there was finger pointing, but eventually people just said, ‘we're gonna go catch up.’”
Winston is also pragmatic, viewing the recent retreats from public commitments by some banks as temporary interruptions in an otherwise unstoppable movement. “It's not great if people are abandoning their goals. But what really matters is, does the work
really stop? I think that remains to be seen. I think the reports of the death of corporate sustainability or clean economy in the US are greatly exaggerated.”