Net Zero Policy at Crossroads: Ley Faces Leadership Challenge Amid Party Room Disunity

Net zero policy faces opposition from conservative Liberals and Nationals, who may have the numbers to dump support for the policy in a joint party room vote. However, in a vote of just the Liberal Party room, the result would be close, with moderate Liberals supporting the policy. Climate Change Authority's upcoming recommendations for Australia's interim 2035 target may force the party to make a decision on the policy, putting Leader Sussan Ley in an awkward predicament.

The Net-Zero Banking Alliance (NZBA), a global coalition of banks committed to reducing carbon emissions, is planning a significant structural overhaul following the departure of several major members. The proposed change aims to transition the alliance from a membership-based organization to a framework initiative, designed to support banks in transitioning to a low-carbon economy.

The NZBA, which was founded in 2021, has lost members across North America, Japan, Australia, and Europe, including UBS, Barclays, HSBC, Goldman Sachs Group Inc., and BNP Paribas SA. Despite these defections, most banks leaving the alliance have maintained their internal net-zero commitments and plan to continue supporting clients in transitioning to a low-carbon economy [1].

The proposed change is intended to facilitate ongoing engagement with the global banking industry to develop further guidance and tools needed to support banks and their clients in the transition to a low-carbon economy. The NZBA's Steering Group believes this model will allow the alliance to remain resilient and continue supporting banks in achieving their net-zero goals [2].

The proposed vote on the structural change is scheduled to take place by the end of September. The outcome of this vote will determine the future of the NZBA and its role in the global effort to combat climate change. The alliance's current membership includes several major banks, such as JPMorgan Chase & Co. and Citigroup Inc., which have not yet indicated their intention to leave the alliance [2].

The NZBA's proposed structural change comes amid speculation that it was about to start losing members based in the European Union, where net-zero goals are enshrined into law. The alliance initially required members to align their financing operations with the goal of limiting global warming to 1.5°C, but it dropped this requirement earlier this year in an effort to stop members from leaving [2].

In conclusion, the Net-Zero Banking Alliance's proposed structural overhaul reflects a strategic response to the challenges it has faced in maintaining its membership. The proposed change aims to ensure the alliance's continued relevance and effectiveness in supporting banks in transitioning to a low-carbon economy.

References:
[1] https://www.ainvest.com/news/net-banking-alliance-suspends-activities-holds-vote-future-membership-decline-2508/
[2] https://www.ainvest.com/news/banking-industry-climate-change-coalition-vote-structural-change-high-profile-member-exits-2508/