Germany’s GLS Bank [UIGLSAB:GR] has quit the world’s largest climate-finance alliance, Net-Zero Banking Alliance (NZBA), in protest at the continued investments in fossil fuels by some group members from the US, as reported by Bloomberg on February 6. According to GLS, it noted that some large NZBA member banks continue to finance new fossil-fuel infrastructure projects on the African continent. However, it did not identify any Wall Street banks by name. A spokesman for NZBA stated it is inevitable for individual exits over time due to various reasons.

Founded in 2021, NZBA is committed to preventing temperature rises above the crucial 1.5°C limit by halting finance for new fossil fuels. All NZBA members formally pledge to align their lending and investment portfolios with the net-zero target by 2050. However, a Reclaim Finance study found that companies inside NZBA have invested over USD269bn of loans in oil, gas, and coal enterprises’ business expansion since the alliance’s creation, with Wall Street firms accounting for more than USD53bn. NZBA is in a tough spot as they have to decide whether to tighten their net-zero standards for members, which could lead to more members leaving, or to keep the standards as they are and to risk some members making false green claims while still funding fossil fuels. Last December, US investment management firm Vanguard Group also left NZBA, noting that its vast index-tracking business made it too hard to commit to net-zero goals.

https://www.bloomberg.com/news/articles/2023-02-06/green-banks-are-starting-to-leave-net-zero-industry-group?srnd=green

https://www.bloomberg.com/news/articles/2023-01-17/citi-bofa-lead-wall-street-banks-funding-fossil-fuel-expansion

https://www.americanbanker.com/news/pushback-from-u-s-banks-softens-gfanz-climate-rules

https://www.reuters.com/business/sustainable-business/vanguard-quits-net-zero-climate-alliance-2022-12-07/