Swiss banking leader UBS has officially left the Net-Zero Banking Alliance (NZBA), becoming the latest major institution to step away from the global climate finance coalition. This decision came as part of UBS’s routine review of its climate and sustainability affiliations, raising questions about the ongoing relevance and impact of the NZBA.

UBS Highlights Maturing Internal Sustainability Frameworks

In an official statement, UBS acknowledged the NZBA’s role in providing helpful frameworks during early target-setting phases but noted that the bank has since strengthened its own internal sustainability capabilities. “Although the NZBA provided valuable frameworks for initial target-setting, the bank has advanced its own capabilities and decided to leave,” UBS said.

READ MORE: German Hesitation on Gaza Risks Atrocities, Say Israeli Academics

A Broader Movement Among Global Banks

UBS joins a growing list of international banks exiting the NZBA, including Barclays, HSBC, JPMorgan, Citi, Morgan Stanley, Macquarie, and Bank of Montreal. Barclays, a recent departure, cited the wave of global exits as a key reason, describing the NZBA as “no longer fit” to support its green transition goals.

NZBA’s Founding and Purpose

Launched in 2021, the NZBA aimed to guide financial institutions in aligning lending, investment, and emissions reductions with the global target of limiting temperature rise to 1.5°C. Yet, intensifying political and regulatory pressures, especially in the U.S., have led many banks to reconsider the reputational and compliance risks of belonging to climate-focused alliances.

NZBA’s Efforts to Stem Membership Loss

In response to the departure of multiple members, the NZBA relaxed some of its more stringent membership rules to slow attrition and better accommodate lenders from emerging markets. The alliance cited the slow pace of real-economy transformation as a key rationale behind these changes, hoping to maintain broader engagement.

Explore OneStop ESG Marketplace: Corporate ESG consulting

Leadership Changes at UBS Amid Exit

UBS’s departure coincides with significant leadership transitions within its sustainability team. Chief Sustainability Officer Michael Baldinger is slated to step down by July 2025. Christian Leitz, currently head of corporate responsibility and the bank’s corporate historian, will take on the CSO role while retaining his existing responsibilities. Oversight of UBS’s sustainability strategy will continue under board member Beatriz Martin Jimenez.

Challenges Lurking for the NZBA

With many founding members now gone and the alliance’s credibility under scrutiny, the NZBA faces significant challenges in remaining a key player in aligning global finance with climate goals. Its future influence will depend on how effectively it can evolve and rebuild trust as banks navigate complex political and regulatory environments surrounding climate commitments.

Explore ESG Solutions on our marketplace - OneStop ESG Marketplace.

Keep abreast of the top ESG Events on OneStop ESG Events.

OneStop ESG Educate: Your go-to source for top ESG courses and training programs tailored to your needs.

Stay informed with the latest insights on OneStop ESG News.

Discover meaningful career opportunities on OneStop ESG Jobs.