Net Zero Banking Alliance: Some European banks may also leave the alliance.

Following HSBC and the exit of several Wall Street giants, the Net-Zero Banking Alliance ( NZBA ) risks losing some of Europe's largest banks. According to the Financial Times, Barclays recently discussed the possibility of an exit with the alliance's leadership and has not confirmed its intention to remain in the group, which it joined in 2021. A formal decision has not yet been made, but investors' reactions to HSBC's decision to abandon the initiative are already being gauged .

UBS , meanwhile, said it is carefully evaluating whether the alliance's new rules, which have been relaxed in recent months, are consistent with its climate strategy. Santander also reaffirmed its commitment to net-zero targets but did not clarify whether it intends to remain in the NZBA.

The uncertainty in the United States reflects a broader shift in major banks' approach to ESG issues following Donald Trump's return to the US presidency and a wave of political criticism, especially from Republicans, against climate activism in the financial sector. Not surprisingly, JP Morgan Chase and Bank of America are among the North American banks to have left the alliance in recent months.

Founded in 2021 with the support of Mark Carney , then Governor of the Bank of England, the NZBA aimed to mobilize a significant portion of global finance toward the goals of the Paris Agreement. Initially, the commitment included aligning banking portfolios with a path to limit global warming to 1.5°C. But last April, members voted to lower the bar to a 2°C limit and removed the requirement to achieve net-zero emissions by 2050, precisely to prevent further defections.

Nonetheless, the strategy of easing the rules does not appear to have yielded the desired results. Currently, the aggregate value of member banks' assets has fallen from $74 trillion in December to $44 trillion. Since 2021, 23 banks have left the group, but over 100 institutions, including more than 80 European ones, have joined.

And on the other side of the globe, while some Asian and Middle Eastern banks are reaffirming their commitment, others, including Japan's Nomura, have already withdrawn. The NZBA, for its part, preferred not to comment on members' "potential decisions," while emphasizing that many have renewed their support for the alliance.