Today, only five North American banks remain in the NZBA. This reflects the growing divide between global climate commitments and regional political dynamics.
Below are the five North American banks that have continued their membership in the NZBA:
Their continued participation underscores a commitment to advancing sustainability goals despite the challenging environment. Yet, this small group represents a significant contraction from the alliance’s earlier North American membership.
U.S. banks have faced mounting scrutiny from Republican-led states accusing them of prioritizing “woke” ESG goals at the expense of traditional energy financing. State governments have threatened divestment and legal action against banks perceived to be boycotting fossil fuels.
This political climate has prompted exits from major U.S. financial institutions, including Goldman Sachs, Wells Fargo, JPMorgan Chase, Citigroup, Morgan Stanley, and Bank of America. These banks cited the growing legal and reputational risks associated with their NZBA membership.
Many banks have expressed concerns about the operational challenges of meeting net-zero commitments. Aligning portfolios with ambitious climate goals is technically and financially complex, particularly in sectors like energy and heavy industry. Balancing these goals with profitability and shareholder expectations has proven difficult.
In a polarized political and social environment, banks risk alienating either climate-conscious investors or stakeholders in traditional energy industries. This reputational balancing act has driven some banks to disengage from alliances like the NZBA.
Canadian banks continue to play a significant role within the NZBA, with Royal Bank of Canada and Vancity being the remaining representatives. Their continued participation signals a more stable political environment for climate initiatives compared to the U.S. These banks have emphasized the long-term financial benefits of sustainability, viewing the energy transition as both a challenge and an opportunity.
Despite this, even Canadian banks face pressure. Critics argue that their ongoing financing of fossil fuel projects contradicts their net-zero commitments. This tension highlights the broader challenges of achieving meaningful progress within the alliance.
The sharp decline in North American participation in the NZBA raises questions about the future of global climate finance initiatives. While some banks have exited due to external pressures, others remain committed to sustainability goals outside formal alliances. This underscores the need for more nuanced and flexible approaches to integrating financial systems with global climate goals.
As the energy transition continues, the decisions made by these remaining banks will serve as a litmus test for the viability of achieving net-zero emissions through collective action in North America.
