The recent shutdown of the UN-backed Net Zero Banking Alliance (NZBA) has sent shockwaves through the green finance world. After global banks, including UK-based HSBC and Barclays, walked away, the once-promising group was forced to close. But what does this mean for the UK’s climate goals?
According to the Bank of England, not much has changed. David Bailey, a top regulator, insists that the alliance’s collapse does not reflect a change in attitude from UK banks. He stated that their engagement with the regulator on climate risk remains as “vibrant” as ever.
The NZBA’s failure began when US banks departed, a move some link to “anti-woke” political pressure. When UK lenders followed, the alliance became unsustainable.
The Bank of England’s argument is that its own regulatory work is more important than voluntary memberships. The PRA was the first central bank to run climate stress tests in 2021 and says it is still monitoring risks from global heating.
However, critics point out that the regulator has yet to implement the toughest measures, such as forcing banks to have a larger capital buffer for loans to heavy polluters. The bank’s commitment will now be measured by its actions, not its words.