A major green pledge from the global banking industry has evaporated into thin air. The Net Zero Banking Alliance (NZBA), which represented a collective promise to decarbonize, is now officially history, having announced its immediate shutdown following a mass desertion by its members.
The pledge began to evaporate under the heat of a new political reality in the United States. The re-election of Donald Trump on a pro-fossil fuel platform turned up the temperature on corporations with environmental commitments. The “anti-woke” movement made it clear that there would be a political price to pay for such pledges.
The first to let their commitment dissolve were the six biggest US banks. In a move to avoid getting burned, JPMorgan Chase, Bank of America, and their peers all backed away from the alliance. This rapid evaporation of support from the world’s most important financial market was a fatal blow.
The trend soon went global. With the American pledge gone, the commitment of international banks like HSBC and Barclays also began to look less solid, and they too eventually withdrew their support. The once-strong promise of a united front had completely disappeared.
The fact that this green pledge could evaporate so quickly has led to widespread disillusionment with voluntary corporate promises. Critics argue that such pledges are written in disappearing ink, only visible when conditions are favorable. They contend that the only way to make a commitment permanent is to carve it into the stone of government law and regulation.