Barclays Withdraws from Net Zero Banking Alliance, Citing Lack of Global Support

Barclays has exited the Net-Zero Banking Alliance, following Wall Street peers and HSBC out of the coalition. Barclays remains committed to its net-zero goals by 2050 and sustainable finance targets, but the alliance's effectiveness has been compromised by the departure of major members. NZBA has shifted its focus to providing financial support for the energy transition, rather than setting targets to limit global warming.

Barclays has announced its withdrawal from the Net-Zero Banking Alliance (NZBA), joining a growing list of major financial institutions that have left the UN-backed coalition. This move follows the departures of HSBC and several Wall Street banks earlier this year, all citing political pressure and legal concerns as reasons for their exit.

Barclays' decision to leave the NZBA marks a significant shift in the financial industry's approach to sustainability. The bank has stated that it remains committed to its goal of becoming a net-zero bank by 2050 and continues to mobilize $1 trillion in sustainable and transition finance by 2030. Despite these commitments, Barclays' exit highlights the challenges faced by the NZBA in maintaining its effectiveness with the departure of major members.

In a statement, Barclays emphasized that the alliance's membership no longer supports its transition goals, as most global banks have withdrawn. The bank's commitment to sustainable finance is evident in its 2024 revenue of approximately £500 million (USD$660 million) from these activities and the cumulative volume of $220.2 billion towards its $1 trillion goal.

The NZBA, in response to the departures, has shifted its focus to providing practical support for banks to lead on climate action and address barriers preventing clients from investing in the net-zero transition. The alliance remains dedicated to its mission, despite the challenges posed by the exit of major members.

The withdrawal of Barclays and other major banks from the NZBA has sparked criticism from sustainable investment-focused groups. Jeanne Martin, Co-Director of Corporate Engagement at ShareAction, described the decision as "incredibly disappointing and a step in the wrong direction." Martin emphasized the need for responsible investors to closely monitor the bank's actions to protect long-term economic prosperity.

The NZBA's effectiveness has been compromised by the departure of major members, but the alliance continues to support its members in leading on climate action and addressing the barriers to the net-zero transition. Barclays' exit highlights the ongoing challenges and political pressures facing financial institutions in their efforts to balance sustainability goals with regulatory and legal concerns.

References:
[1] https://www.esgtoday.com/barclays-exits-net-zero-banking-alliance/
[2] https://www.ainvest.com/news/wall-street-analyst-upgrades-meta-microsoft-ebay-2507/