The Net-Zero Banking Alliance (NZBA) has had a challenging past few years. As scrutiny of climate alliances increased among red-state attorneys general, threats of enforcement made banks wary of the NZBA. This resulted in a mass exodus of NZBA members. In an attempt to retain members, NZBA loosened its portfolio requirement rules, but that wasn’t enough to assuage the financial sector’s concerns and win back members. Now, NZBA is undergoing a radical shift. The organization initiated a vote, which, if passed, will change its organization from a member-based industry coalition to a framework provider. ESG Today reports:
“The Net-Zero Banking Alliance (NZBA), a UN-backed banking sector coalition dedicated to advancing global net zero goals through their financing activities, announced that it has paused its activities following a series of high-profile departures from its ranks, and has proposed a significant restructuring, including dropping its format as a membership-based alliance. The NZBA said that it has initiated a member vote on its proposed transition to continue operating as a new framework initiative, with results of the vote to be released at the end of September.”
While many firms exited NZBA, those that did almost uniformly affirmed their commitment to decarbonization in their exiting statements. These commitments indicate that there may be demand for NZBA to reform itself as a framework provider for the financial services sector. However, NZBA shouldn’t expect its antitrust woes to be behind it. The Florida Attorney General recently announced an antitrust investigation against the Carbon Disclosure Project (CDP), which promulgates standards and frameworks for emissions disclosures. NZBA’s new structure may face similar investigations and litigation from anti-ESG.
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