When alliances fold: What the end of NZBA means for climate finance and investor stewardship

In October 2025, the Net-Zero Banking Alliance (NZBA) announced it would dissolve its membership structure and cease operations, keeping only its guidance documents publicly available. The move followed months of internal debate and a member vote, marking the end of one of the financial sector's most influential climate alliances.

Launched in 2021 under the UN Environment Programme Finance Initiative (UNEP FI), the NZBA united nearly 150 banks representing more than 40% of global banking assets. Its mission was to align the sector around a shared goal: achieving net-zero emissions by 2050, with interim 2030 targets for lending and investment portfolios.

But the alliance was more than a pledge. It created technical guidance, sectoral financing methodologies, and disclosure frameworks that helped banks translate ambition into action. It acted as a bridge between public commitments and operational practice — a common language for transition finance.

Four years later, that infrastructure has fractured. The implications reach far beyond banking.

Why the NZBA collapsed

At its core, the NZBA aimed to deliver collective accountability for the financial system's role in decarbonisation. Members agreed to science-based targets, regular reporting, and engagement with clients to reduce financed emissions.

Yet, cohesion proved fragile. Three forces converged to undermine the alliance:

• Political backlash in several markets turned climate alliances into flashpoints

• Divergent regulations across jurisdictions made harmonised action difficult

• Legal concerns grew as members worried that alliance-level obligations might expose them to litigation or constrain lending flexibility

The exodus began in late 2024, when U.S. banks including Goldman Sachs, JPMorgan Chase, and Morgan Stanley withdrew. By mid-2025, HSBC, Barclays, and UBS had followed. Between November 2024 and August 2025, member assets fell from $75.5 trillion to $42.2 trillion. The remaining members voted to dissolve the formal structure, preserving only the guidance documents for public access.

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Beyond voluntary alignment

The collapse of NZBA underscores a hard truth: some voluntary coalitions can only go so far. They depend on trust, shared incentives, and political stability - conditions that can shift quickly.

Without the discipline of peer accountability, there's a risk that net-zero commitments turn into "zombie targets" - goals maintained in name only, detached from capital allocation or client engagement.

This raises a wider question: what replaces voluntary alignment? Some see a future where regulation steps in, with climate-related capital requirements or enhanced disclosure mandates to ensure that climate risk is treated as financial risk. Others argue that investor stewardship must evolve to fill the gap, enforcing accountability through active ownership and data-backed engagement.

Either way, the era of symbolic alignment is ending. The next phase demands evidence of progress, not membership badges.

From choreography to capital

For four years, NZBA offered a shared choreography for climate ambition—coordinated targets, guidance, and signaling. But the real test has always been capital movement.

Without collective structures, accountability now sits with individual institutions and their investors. The focus shifts from who signed a pledge to how financing decisions drive or delay the transition.

That means looking deeper into:

• How lending and underwriting align with 1.5°C scenarios

• How transition finance frameworks are applied in high-emission sectors

• How progress is reported—not as rhetoric, but as data

Investors can no longer rely on alliance membership as shorthand for climate integrity. Stewardship now means interrogating strategy, financing, and execution directly.

What effective stewardship looks like now

Consider an asset manager holding stakes in several global banks. Previously, the manager could cite NZBA membership as evidence of alignment. Now, credibility depends on proof:

• Direct engagements on financed-emissions targets and transition finance activity

• Tracking governance reforms that strengthen climate oversight

• Escalating when commitments weaken, with clear evidence trails

• Reporting measurable outcomes to beneficiaries

  
  

This marks a shift from passive oversight to active, data-driven stewardship - where influence is earned through persistence, transparency, and results.

The infrastructure for a post-alliance world

To deliver this new form of accountability, investors and banks need more than good intentions. They need systems that make stewardship auditable:

• Centralised engagement tracking to document every conversation and outcome

• Integrated data systems linking ESG analysis, voting records, and financing data

• Clear escalation frameworks with defensible evidence trails

• Real-time intelligence identifying where influence drives genuine change

In the absence of alliances, infrastructure becomes the new enforcement. Transparency replaces peer pressure. Data replaces declarations.

A new phase of climate finance

The NZBA's dissolution represents both a cautionary tale and an opportunity. It exposes the limits of this model of voluntary coordination, but also opens space for something more robust: a system where capital, regulation, and stewardship work in concert.

For banks, credibility will depend on transparent financing and governance. For investors, influence will depend on rigorous engagement and measurable outcomes. For regulators, the task may soon be to turn ambition into enforceable risk standards.

At Impactive Tech - a provider of stewardship infrastructure and engagement analytics - we see this as a moment to double down on what builds real trust: direct dialogue, transparent data, and systems that turn engagement into evidence.

When alliances fade, ambition shouldn't disappear - only ambiguity should. And in that clarity lies the future of responsible finance.