Wall Street banks like Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, and JPMorgan Chase & Co. have withdrawn from the Net-Zero Banking Alliance (NZBA) due to political pressure. The alliance, established in April 2021, aims to align financial activities with net-zero greenhouse gas emissions by 2050. It has 142 members from 44 countries.
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Wall Street banks, including Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, and JPMorgan Chase & Co., have withdrawn from the Net-Zero Banking Alliance due to political pressure.
The NZBA was established in April 2021 by 43 leading global financial institutions as a part of the United Nations Environment Programme Finance Initiative (UNEP FI).
It is a global coalition of banks committed to aligning their financial activities—lending, investment, and capital markets—with the goal of achieving net-zero greenhouse gas emissions .
The main objectives are to help banks to shift their lending and investment portfolios to net-zero emissions by 2050.
Member banks must set interim targets for 2030, focusing on sectors with high greenhouse gas emissions.
Banks are also required to publish their emissions and track progress annually to align their financial activities with global climate goals.
The NZBA is governed by a Steering Group, which is selected from member banks and represents a diverse range of geographies and business models.
The United Nations holds a seat on the Steering Group. The alliance operates under governance documents updated regularly, with its latest updates in March 2024.
Banks joining the NZBA must transition their greenhouse gas emissions from lending and investment portfolios to net zero by 2050.
They must set clear targets for 2030 and 2050 within 18 months of joining. Further targets are to be set every five years. The focus will be on GHG-intensive sectors initially.
Banks must publish their emissions data annually.
As of January 2025, the alliance has 142 members from 44 countries, with 80 European banks representing the majority of its assets. Currently, no Indian bank is a member of the Net-Zero Banking Alliance.
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PRACTICE QUESTION Q.Consider the following statements in the context of the Net-Zero Banking Alliance (NZBA): 1. The alliance is committed to aligning its activities with net-zero greenhouse gas emissions by 2050. 2. No Indian banks are members of the Net-Zero Banking Alliance (NZBA). 3. It is convened by the United Nations Environment Programme Finance Initiative (UNEP FI). How many of the above statements are correct? A) Only one B) Only two C) All three D) None Answer: C Explanation: Statement 1 is correct: The NZBA is a global alliance of banks that have committed to aligning their activities with net-zero greenhouse gas emissions by 2050. Its goal is to assist banks in lowering their carbon footprints by aligning lending, investment, and capital markets activities with net-zero emissions. Statement 2 is correct: The NZBA is open to all banks worldwide. As of January 2025, the alliance has 142 members from 44 countries, with 80 European banks accounting for the majority of its assets. No Indian banks are members of the Net Zero Banking Alliance (NZBA). Statement 3 is correct: The NZBA is convened by the United Nations Environment Programme Finance Initiative (UNEP FI). It is part of the UNEP FI's Principles for Responsible Banking (PRB). |
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