Today October 3rd 2025 the NZBA announced its end. This marks a major setback in the mobilisation of the financial sector for climate action. Last January, the GFANZ made significant changes in its strategic positioning.
What legacy does the NZBA leave behind? What remains of banks’ net zero interim targets? What future for private finance contribution to the transition?
2025 is a pivotal year in the transition of private finance. The global climate finance landscape is undergoing considerable changes. Notable modifications in strategic orientation are occurring in the Glasgow Financial Alliance for Net Zero (GFANZ), and its banking arm, the Net-Zero Banking Alliance (NZBA), ended on October 3, 2025, following several months of withdrawals, guidelines softening and members consultations.
Major U.S. banks – Goldman Sachs, JPMorgan Chase, Citigroup, Wells Fargo, Morgan Stanley – have first withdrawn from the NZBA, reducing the alliance’s U.S. banking sector coverage from 44.6% to just 0.045% of assets. This wave of exits, lately followed by European banks – HSBC, Barclays and UBS – was driven largely by political pressures as well as legal pressures like antitrust lawsuits and interpretations of fiduciary duty. And while the grounds for these legal pressures seem weak, their consequences are not – as evidenced by BlackRock’s departure from NZAM and the end of the NZBA.
Hence, GFANZ has redefined its purpose, from ‘a whole economy transition’ in 2021 to ‘transition finance opportunities and solutions’ in 2025 [1]. Before its end, the NZBA updated its guidelines to soften mandatory 1.5°C alignment, now allowing broader, less prescriptive pathways toward carbon neutrality. Former ‘Guidelines’ became non-binding ‘Guidance’, marking a notable decline in ambition and uniformity of climate targets. This retreat is seen as a concession to political realities, particularly in the U.S., but raises concerns over transparency, accountability and probable greenwashing.
Amid the dilution of climate commitments, a new strategic pivot is emerging: redirecting efforts toward bridging the energy transition finance gap in emerging markets. This shift is in line with international objectives and responds to the chronic under-allocation of global capital to low-carbon projects in the Global South. While promising, the approach’s success will hinge on enhancing the pipeline of “bankable” projects, where risk-return profiles meet investor requirements to draw in private capital from GFANZ members.
Our study shows that despite institutional withdrawals and relaxed NZBA rules in April 2025, the majority of banks – especially in Europe – have so far maintained their individual sectoral decarbonization and sustainable financing targets. Almost all European banks reviewed retained their interim sectoral and financing targets from 2024 to 2025, with a few reinforcing them. In America and Japan, banks displayed a wider range of reactions. Among 9 banks reviewed, only 3 have explicitly restated their targets in 2025: Scotiabank, MUFG and Mizuho, others provided limited or no updates, indicating a potential pause or reconsideration of their climate strategies. Notably, Wells Fargo made the decision to formally drop its sectoral emissions reduction targets altogether.
2025 was supposed to be the due date for the first interim targets. Instead, the challenge expected from private finance lies in the means to contribute to global climate finance goal, and how they will live alongside existing portfolio decarbonization targets.
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[1] Glasgow Financial Alliance for Net Zero, October 2021 and September 2025
