UBS Exits Net-Zero Banking Alliance, Latest Big Bank to Withdraw from UN-sponsored Climate Group

UBS has left the Net-Zero Banking Alliance, following peers like JPMorgan, Citigroup, HSBC Holdings, and Barclays. The Swiss bank cited an annual assessment of sustainability and climate-related memberships, but emphasized its commitment to sustainability and the importance of a low-carbon economy transition. UBS was a founding member in 2021 and acknowledges the alliance's role in industry progress.

UBS Group AG has announced its withdrawal from the Net-Zero Banking Alliance (NZBA), following the recent exits of several major banks including JPMorgan, Citigroup, HSBC Holdings, and Barclays. The Swiss bank cited an annual review of its sustainability and climate-related memberships as the reason for the departure [1].

UBS joined the NZBA as a founding member in 2021 and has acknowledged the alliance's role in advancing global net zero goals through financing activities. The bank stated that it remains committed to its decarbonization targets and the importance of an orderly transition to a low-carbon economy [1].

The decision to leave the NZBA comes after UBS reset its key climate goals earlier this year. The bank pushed back its target to achieve net zero greenhouse gas (GHG) emissions in its operations to 2035 and withdrew a target for its Asset Management division to align 20% of its assets under management (AUM) with net zero by 2030 [1]. These changes were attributed to the bank's recent acquisition of Credit Suisse.

Despite the withdrawal, UBS emphasized its ongoing commitment to sustainability and its efforts to embed sustainability and climate risk into its risk management and stress-testing frameworks. The bank also noted its intention to support its clients in understanding the impact of climate change on their business models and investments [1].

The stream of banks exiting the NZBA over the past several months has been driven by significant pressure from Republican politicians in the U.S. who have warned financial institutions of potential legal violations from their participation in climate-focused alliances [1]. Following the departure of North American banks, the NZBA agreed to a series of significant changes to its framework and principles, including eliminating a mandatory requirement for banks to align lending and capital markets activities with the goal of limiting global warming to 1.5°C [1].

In response to UBS' announcement, an NZBA spokesperson stated that the group remains focused on supporting the many committed banks driving the net zero transition. The spokesperson emphasized the need for bold action from the banking sector to deliver on the alliance's long-term goals [1].

References:
[1] https://www.esgtoday.com/ubs-exits-net-zero-banking-alliance/
[2] https://theedgemalaysia.com/node/765710