Barclays exits UN-backed Net-Zero Banking Alliance in a move that has stirred debate about the future of sustainable finance and the role of banks in climate action. The bank’s exit from an integral part of the Glasgow Financial Alliance for Net Zero (GFANZ), the Net-Zero Banking Alliance (NZBA), suggests there have been some updates to the bank’s climate pledges.

This occurred in the period following the exits of six U.S. and five Canadian banks between December 2024 and January 2025, and it was also announced on July 11, 2025, that HSBC would exit. The series of exits has cast doubt on the NZBA’s future and the feasibility of collective climate action in the financial sector.

Why Are Banks Leaving the NZBA?

Formed in April 2021 under the UN Environment Programme Finance Initiative (UNEP FI), the Net-Zero Banking Alliance required members to align their lending and investment portfolios with the Paris Agreement goals. Members are committed to a science-based goal-setting process and sharing their outcomes transparently.

Unfortunately, many similar institutions withdrew between late 2024 and mid-2025, indicating political pressure or a lack of faith in the alliance’s efficiency.

Key Bank Departures from NZBA

*JP Morgan, Citigroup, Bank of America, Morgan Stanley, Wells Fargo, Goldman Sachs
**TD Bank, Bank of Montreal, National Bank of Canada, CIBC, Scotiabank

Political and Market Pressures

In the U.S., banks reportedly faced backlash from Republican lawmakers who criticized ESG-aligned financing as “woke capitalism.” When Donald Trump was re-elected to the presidency in 2024, several American banks withdrew from the alliance, dismissing climate change and actively encouraging investment in fossil fuels. Banks in Canada and the UK, such as Barclays, followed the departure from the arrangement, stating a decrease in membership in the alliance as one of the key reasons for leaving.

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Barclays’ Green Commitments Under Scrutiny

Barclays promised $1 trillion in sustainable financing by 2030 and reiterated its aim to reach net-zero emissions by 2050 despite the NZBA withdrawal. It invested more than £508 million in climate technology since 2020 and produced £500 million from green initiatives in 2024.

Critics, however, draw attention to contradictory behavior. With $35.4 billion in fossil fuel finance in 2024, a 55% increase from the year before, Barclays was named Europe’s largest fossil fuel funder by Rainforest Action Network and Reclaim Finance.

The decision was deemed “incredibly disappointing” by ShareAction, particularly considering that it was made just days after Barclays reaffirmed its net-zero objectives. Climate activists say the news gives conflicting clues about the bank’s long-term climate strategy.

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What This Means for Climate Finance

Expert opinions on the impact are mixed. Some contend that rather than influencing legislation, the NZBA served more as a branding instrument. Others, however, caution that if it weakens, climate finance in sensitive areas like Southeast Asia may be disrupted.

While Barclays exits the UN-backed Net-Zero Banking Alliance, its actions and those of other major financial players will remain under scrutiny as global efforts to fund climate resilience continue.

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