Members of the Net Zero Banking Alliance (NZBA) have voted overwhelmingly in favour of adopting changes to the framework, following a mass exodus of banks from the alliance earlier this year. The strategic review, which has reportedly been underway for a year, has introduced more pragmatism to the framework, allowing banks more agency to achieve their individual climate targets. The renewed guidance aims to recognise that many members are subject to “significant new external climate reporting requirements” and that there is a “wider range” of net zero pathways that alignment with the goals of the Paris Agreement, rather than just a 1.5°C pathway. This latter change follows concerns that the NZBA would be dropping the alliance’s 1.5°C target altogether. “We are halfway through the critical decade for action of climate, and we need all sectors, including banking and finance, to commit to moving the needle on emissions reductions,” said Shargiil Bashir, NZBA Chair and Chief Sustainability Officer at First Abu Dhabi Bank. “As the largest global initiative specifically focused on supporting climate mitigation action by banks, NZBA is uniquely positioned to provide practical support to banks navigating the net zero transition.” NGO Reclaim Finance said the alliance had taken “a giant leap backwards”. Director Lucie Pinson added: “We expect each NZBA member bank to declare its own position. If they fail to reaffirm their commitment to 1.5°C, their stakeholders, including supervisors, investors and the public, will know that the banks cannot be expected to reduce climate risks but will continue driving the world toward climate disaster.” Following recent departures, the NZBA has 129 members across 44 countries with US$47 trillion in combined assets.
